14 DAY TRIAL // An estimate about the value of the raw hardware that powers the Nintendo 3DS handheld says that the components add up to a little over 100 dollars, meaning that the hardware company probably makes quite a bit of profit on all of the devices it sells.
An analyst from UBM TechInsights has said that the components that are included in the Nintendo 3DS launch model have an overall cost of 101 dollars, which is 15 more than the cost for the latest version of the Nintendo DSi.
The Nintendo 3DS sells for 250 dollars in North America and comparable prices in Japan and in Europe.
Nintendo also incurs costs associated with research and development, labor, packaging, distribution and, of course, marketing.
The company has not said how much profit it expects to make from the sale of the Nintendo 3DS, but the President of Nintendo, Satoru Iwata, has said that the company will not sell the device below cost in an effort to gain market share fast.
It seems that Nintendo has a philosophy of only launching new hardware that can be profitable from the first day it arrives on the market.
The Nintendo 3DS is important because it is the first mass market gaming console which allows the player to experience three-dimensional titles without needing to use any of the cumbersome glasses that the experience requires on home consoles.
Reports from iSuppli suggest that the Xbox 360 from Microsoft has only become profitable for Microsoft about one year after the launch date, when economies of scale and price drops for some components kicked in.
The same company says that when the PlayStation 3 was out, Sony was losing 300 dollars on each unit and that the profitability threshold was only within reach late in 2009, when the redesigned Slim version of the console was introduced.