Report: $250 Nintendo 3DS costs $101 to build (So what?)

Mar
24

Report: $250 Nintendo 3DS costs $101 to build (So what?)

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?

Nintendo 3DS board 570x325 Report: $250 Nintendo 3DS costs $101 to build (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.

About Jason Evangelho

Jason is VGW’s founder, publisher, and longtime podcaster, writer, and “solopreneur” who is driven by the classic Jello Biafra quote “Don’t hate the media. Become the media.” You can hear him ranting alongside the VGW Collective in the site’s official podcast, “Unlimited Ammo.”

8 Comments

  • Mar 24, 2011 @ 11:02 am

    I didn’t realize this required an explanation beyond “OK, so go ahead and build yourself a 3DS, wise ass.”

    Reply
  • Mar 24, 2011 @ 11:08 am

    I demand Cheaper prices!!!

    Reply
    • Cyber_man99
      Mar 24, 2011 @ 11:46 am

      …this is just a hardware parts ESTIMATE, there’s no way they can actually get a good estimate on an in-house cpu, and a GPU thats produced by a relatively unknown gpu manufacturer, aaand the cost of the actual molding and bonding process that Nintendo researched and developed soley for the 3DS….

      not included in this $101 ESTIMATE are things such as research, development, OS, built in software, advertising, the injection molding process N invented, i just dont get how they came up with this silly estimate

      Reply
      • Mar 24, 2011 @ 11:57 am

        @Cyber: which is actually why I felt the need to write this. In fact, do you mind if I augment it with some details about the molding process? That’s new info to me…

        Reply
        • Jul 19, 2011 @ 14:51 pm

          you know the dsi cosT half of a 3ds and it was being sold at 200$ 3ds is double the price to manufacture and people complain about a quarter price raise?

          Reply
  • Kevinbalt
    Mar 24, 2011 @ 11:50 am

    Actually, this information isn’t meant for consumers. It’s meant for investors. It gives a few important pieces of info: 1) profit per unit, and 2) how much room there is to expand the market (Nintendo can’t sell the device for too much less than the build cost, and 3) how much room there is for price competition from new entrants.

    Reply
  • Mar 24, 2011 @ 14:36 pm

    Doesn’t make me feel any better, knowing how the competition operates. For instance: Sony always loses money on the hardware at launch, with the only exception being revised designs (PSone, PS2 slimline, PSPgo, etc; these aren’t new platforms, though) … and like Nintendo they also pay for those years of R&D, the marketing and advertising, and so forth.

    And you ask “So what?”
    How about this: So what’s Nintendo’s excuse?

    Reply
  • bored
    May 7, 2011 @ 15:08 pm

    I don’t understand why people care about the cost of the product we live in a capitalist society and business operates to make a profit at the highest margin possible not to help consumers by giving us cheap goods. If capitalism operated that way our economy would fail to expand. Or another way to look at it it is if Nintendo failed to sufficiently mark up their products they would lack the money to operate and further research/develop their future products. Another way to look at it it Greedy is good and another way to look at it Who cares!!!!!!!!!!!!!!! lol

    Reply

Leave a comment