When I bought this game, I was expecting to play it with a few friends and my family, and that's how I played it primarily. Almost every game is fun (the primary exception being Baby) and almost every game is really responsive (the primary exception being shave due to the gyros not working well while the controllers have their face buttons facing straight up or down). As I said, it works well for groups of all sizes, and I'll have two reviews, one for small groups of 2-5 people, and one for groups 6+ people.
Small Groups: All of the two player games work well for small groups, especially if the other members have a way to get involved, even while not playing. The game Soda Shake is particularly good in small groups, though I personally prefer it with two people as it gets really intense towards the end of the game.
Large Groups: This is where 1-2-Switch shines. I played this game with a group of 15+ people in my college's gaming organization. It brought several normally shy or awkward people out of their shells, and led to some hilarious moments and fond memories all around. Almost every game was played that night (all but Baby and Air Guitar), and everyone enjoyed playing/watching the action. Games like Sword Fight led to massive cheers at the ends of particularly close matches, and games like Plate Spin left the audience in uproarious laughter. Even a game of Dance Off led to cheers and standing ovations at 1:00 am as someone had received a score of 9970, assuming that 9999 is the highest, that's really good.
All in all, 1-2-Switch is a great game. $50 is a bit much, but I'd say $40 is a decent price. If you have Amazon Prime as I do, or see it on sale somewhere for $40 or lower, definitely pick it up. It is well worth the buy.