A “preliminary estimate” puts the costs associated to build a single unit of Nintendo’s 3DS at only $101, according to a report from Eurogamer. The estimate is only for the raw materials and based on a quote from IT consulting firm TechInsights. The article was also quick to point out that this exceeds the production costs of the Nintendo DSi by only $15.
We’d like to offer this highly educated and carefully pondered opinion into the mix: So what?
In a consumer trend we find completely irrelevant, new technology is frequently dissected, diagnosed and released with sensational “only costs $X to make” headlines meant to evoke a knee-jerk reaction out of the public. After all, how dare a company try to make a profit! We’re a nation of entitled gamers, and we demand cheaper prices!
Our very own Sam Demi recently explained why these types of article are deceiving when it was revealed that Microsoft’s Kinect peripheral totaled $56 in parts. While the nation balked at Microsoft’s greediness, Sam logically reminded readers that those costs were only a fraction of what you’re paying for at retail.
Developing the 3DS cost Nintendo millions in research and development costs. Those years of research also culminated in 1000’s of man hours. Prototypes must be developed for testing. Software engineers are hired to assemble the necessary programming, and development kits need to be created and sent to game developers all around the world.
Products don’t sell themselves, either. Marketing programs and materials need to be designed, printed, polished to perfection. The exorbitant costs of television advertising need to be factored into the equation. And let’s not forget the distribution chain and the labor required to assemble the 3DS units. Even the packaging and fuel goes into the final pricetag on the shiny new 3D handheld you may or not be buying this Sunday.
Even if you toss out all of these arguments, companies like Apple have proven that they can launch new hardware at double the costs of production. (Remember when the original iPhone cost an astronomical $599 and sold like hotcakes?) If we as consumers aren’t happy with the pricing of new gadgets, we can vote with our wallets. Still, even though this news is only hours old, it’s sure to illicit negative reactions on forums and comment threads the world over. But when we analyze the true costs involved with launching a new game console (or electronic gadget in general), we can’t help but come to Nintendo’s defense.