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Nintendo 3DS costs about $100 to manufacture

If you shelled out $250 for a Nintendo 3DS, it might interest you to know that it probably only cost Nintendo $103 to produce that new handheld device. That’s according to a report from research firm iSuppli. Meanwhile, UBM TechInsights, estimates that it only costs $101 to produce a single 3DS unit.

Previously, the only hints to the true costs of the 3DS were comments by Nintendo personnel like Reggie Fils-Aime, who said that the device would be profitable at launch, or Satoru Iwata, who ruled out selling the device below cost. To put things in perspective, the Xbox 360 took a year to reach profitability and the PS3 took over three.

iSuppli's breakdown also served to uncover more detailed technical specifications of the device’s components. The handheld has a dual core ARM processor, 756 MB combined RAM, and the most expensive single piece of hardware is the 3DS screen for $33.80.

The suggested retail price of the 3DS may sit at $249.99, but Nintendo isn't necessarily walking away with $150 for every 3DS sold. The breakdown does not include development costs, infrastructure costs, or possible software licensing fees.

[Source: Wired]

Mar 31, 2011

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19 comments

  • Hamburgers - April 5, 2011 5:25 a.m.

    My god the price fits the demand not the initial cost, the damn editors on this site just like making dramatic headings and sometimes those headings are worded to start shit where shit should not be started as the case with this very article.
  • AFilthyIbis - April 1, 2011 10:41 a.m.

    The 3ds sells for $349 in Australia. Fuck this shit I'm making my own.
  • TheVoid - April 1, 2011 12:46 a.m.

    Beyond justifying where that additional $150 goes, let's not forget it's Nintendo's right to charge as much as they want for it, and our right to bite (or not) on said price. Personally I don't care if Nintendo was able to push out a 3DS for $10 and marked it up to $250 - if that's the price the market is currently willing to spend, then good for Nintendo and their bottom line. Don't forget that every little penny between the manufacturing cost and the retail price doesn't need to be accounted for. There's nothing wrong with plain old profit!
  • ThatFanInThePeacoat - April 1, 2011 12:17 a.m.

    Most of the products we buy are much cheaper to make than they sell for (shoes notably... especially NIKE).
  • Eliath - March 31, 2011 11:11 p.m.

    Working in a manufacturing job in the field of electronics this information, as others have pointed out, is relatively pointless. There are R&D costs and tooling costs to recoup. There are markups each step up the ladder. The factory or factories that make the 3DS might have a cost of $101, but there will be a markup on the corporate side so that the manufacturing plant(s) make a profit. Nintendo as a corporate entity probably has a markup before selling the unit to retailers to make a profit on the corporate side, and retailers probably have some markup before selling to the end customer. This also doesn't take into account continued costs for technical support, warranty, and marketing campaigns. On top of that there are tariffs associated with exporting the units to any foreign country (I'm not too knowledgeable in that area though so I might be wrong). Nintendo is probably making a decent profit, but in the consumer electronics world a 150% profit margin really is quite low even if Nintendo received all $150 for each sale. Apples to oranges comparison: look at the price of a Monster branded HDMI cable from a retailer like best buy and then look at the price of a similar HDMI cable from monoprice.com. With all that said this is still an interesting article.
  • MikeT - March 31, 2011 11:01 p.m.

    That's not bad at all, y'know restaurants standard markup for food is 400%? I don't know if this is an unfair comparison. Actually this article is kind of stupid. That's like saying a textbook costs 2 dollars to make and they sell it for 100 dollars.
  • Smeggs - March 31, 2011 9:04 p.m.

    Yeah, gotta take into account how much the hardware cost, time spent, how much they sell it for to retailers and how much of the profit the retailer get off of each sail. At most I think Nintendo is maybe pulling somewhere between $50-$100 sollars from each sale. Still, y'know I could go out and buy an Xbox Arcade for just about $140 right now, which is an already established system with many great games for it and coming out still. I personally think it's insane to buy a system during its first year or two. Just look at the PS3 for example: $500-600 at the start, went for three years with basically nothing big enough to speak for it other than MGS4 (Which doesn't interest me enough to warrant that amount of money) and LittleBigPlanet. Now I could go out and buy an original PS3 for something around $230. ReCAPTCHA: Ridiculous Looks like the ReCAPTCHA agrees with me.
  • insertdisk - March 31, 2011 8:13 p.m.

    I was surprised at how similar the manufacturing costs are to the DSI Xl the biggest difference was the RAM. Very interesting.
  • therawski - March 31, 2011 7:47 p.m.

    Nintendo obviously had to buy these components in bulk resulting in a discount. The average hobbyist would probably have to pay a lot more for these parts individually, not to mention printing of that big ass manual in 3 languages (print still not dead for good reason (maybe not this one))
  • robotmand - March 31, 2011 7:20 p.m.

    "The suggested retail price of the 3DS may sit at $249.99, but Nintendo isn't necessarily walking away with $150 for every 3DS sold. The breakdown does not include development costs, infrastructure costs, or possible software licensing fees." Also, let's not forget that the stores selling the units probably aren't doing it for free either.
  • ALinkToTheZack - March 31, 2011 7:11 p.m.

    How much did the original DS (phat) cost to make?
  • Ridureyu - March 31, 2011 6:54 p.m.

    Not a big markup at all. Even if you decide to ignore development, infrastructure, software licensing, advertising, employee salaries, testing, shipping and transport, quality control, etc., which drain away from profit, you have to understand that wholesale development costs are NEVER the same (or close, honestly) to what something sells for. That's just normal. Complaining about this is like saying, "How DARE Nintendo try to make money!" Now, if they were charging $350-$400? Then yeah, awful markup. But this isn't. It's a 150% increase. If you factor in all the above qualifiers, it's going to be a lot less than that. And if you remember that launch prices are meant to be high so they can be discounted later, then it's even slimmer - Nintendo will choose a time to slash 3DS prices, just like they have with everything else. They need to make sure that they still make money after they do that.
  • marktsedita - March 31, 2011 6:50 p.m.

    "The suggested retail price of the 3DS may sit at $249.99, but Nintendo isn't necessarily walking away with $150 for every 3DS sold. The breakdown does not include development costs, infrastructure costs, or possible software licensing fees." I feel like every article with this headline forgets to add this. Thank you!
  • buro13 - March 31, 2011 6:44 p.m.

    I use to work at Best Buy before college, I can tell you they did not make any money on systems, thats why they pushed games and accessories so hard, thats where they make their money. Supply and demand dictates the market price. Obviously Nintendo hit the mark perfectly, if you dont like the price everyone should not buy it and you will see prices fall dramatically. Consumers have purchasing power, based on our demand for a product a market price is then dictated. Plus Nintendo knows there is no other device currently that gives you a glasses free 3D experience. Advantage Nintendo while consumers just look at the 3DS with their tongues out and open their wallets. I just saw the 3DS for the first time 3 days ago at a display unit, I was left impressed.
  • dphoenix192 - March 31, 2011 6:39 p.m.

    Nintendo is selling the console at $180 to stores, so they would only be making $80, and you have to take into account development costs(and everything else GR mentioned).
  • Azymuth - March 31, 2011 6:31 p.m.

    You do know that on the 250$, the store walks away with about half of it? It only leaves 25-30$ of profit for Nintendo.
  • CharlieFockstrot - March 31, 2011 6:29 p.m.

    That must be why Ridge Racer 3D looks inferior to the PSP launch version.
  • SteampunkJim - March 31, 2011 6:24 p.m.

    Not knowing much about system pricing, that seems like a BIG markup.
  • oneshotfinch - March 31, 2011 6:20 p.m.

    Nintendo knows how important it is to be affordable, so I doubt they did this just to make short term launch cash.

Showing 1-19 of 19 comments

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