Nintendo's 3DS may set customers back £200 in many places, but it only contains 60 quid's worth of parts, apparently. UBM TechInsights has been taking apart hardware again, this time estimating the cost of the components used to make the 3DS is $101 (£62), roughly £10 more than the cost of the bits in the DSi, which launched in …
The retail price has nothing to do with the cost of producing an item. The price is all to do with how much people are prepared to pay for an item.....
you also have to consider the distribution, legal, packaging, marketing and manufacturing costs... then throw on top the R&D which will probably push up the cost form £62 per unit for components to well over the £100 mark.
Nintendo and every other producer of consumer products don't do it for the good of their health (or yours), they do it for profit and the return has to be worth the risk of the initial outlay.
still, its disgusting that it the comparison to the costs of the DSi is way out of proportion to the 3DS. I personally think they are under-estimating the appeal of 3D products.
The price is all to do with how much people are prepared to pay for an item.
That is also called greed. Emporers new clothes, yes very nice, very expensive...
This is the one reason why the 'free' market is also regarded as a bunch of capitalist pigs.
When you recieve more money* than the effort involved you devalue the money.
* where money is defined as a token representing man hours of production,ie earnings for working.
Thanks for parroting what the article already said:
"Obviously other costs aren't factored into this total price, such as labour, marketing, packaging and R&D, but surly there's a lot of profit being made down the line"
yes i agree
If Nintendo were really in the profit-making business then they'd produce scents, fashion label clothing and jewellery. Then they could get away with margins of hundreds or thousands percent.
IP costs? Marketing?
You also need to factor in intellectual property (IP) licensing costs, which can be significant per unit cost, and marketing costs. Typically console vendors make little if anything on the console -- games licensing is where it's at. MS has lost money for years on XBOX -- price to retailers is less than what it costs to make.
How dare they?
How dare they make a profit from selling their games console?! I mean the cheek of it, selling the thing above the cost of the parts - what are they thinking?
Wouldn't something be really wrong if they weren't making a profit?
The PS3 is sold at a loss and always has been. Even though a lot of muppets said it was over priced.
You just proved my point.
Surely you didn't mean I'm surly, Shirley?
£140 in labour
£60 in parts, not bad.
Price of everything..
"Cheap as chips"
That's the tag line the same author used in the Kinect article. It's not that clever, and it's not just about chips. Nintendo's R&D dept must cost a bit to run, and I'd say they earn their keep.
How much R&D is involved in slapping a 3D screen on something already on the market? Given the price difference between the DS and 3DS, it appears to come to >£50 per unit.
Run out and buy one quick
Nintendo says that supplied are running low, avoid missing out....
Consumers = morons.
Teardown costs are pointless
So that would be £140 profit if it was designed and built by inteliigent robots that are free, never break down and are solar powered.
In the real world things are designed by humans, built partly by humans. Everyone of these people needs a living income. Plus TV adverts aren't cheap.
You do know that a DVD or Blu ray is a piece of plastic that costs 5p or less to make?
the production cost of a blu ray is a lot more than 5p. In fact the box a blu ray comes in costs more than 5p to make.
FCRAM - nice and OMS selling something at cost.
Hmmm, sounds interesting RAM indeed. As for the whole aspect of there only being one supplier (apparently Fujitsu) I would wonder if they have looked into Toshiba Electronic Components production lines, or overlooked them. Perhaps it aint official. But that RAM sure would look on some portable netbooks - erm I mean tablets with non optional keyboards.
But apart from this FCRAM it is nice to see a electronics company do something new and not bust tehre wallet selling a loss-leader for years and assuming they will get it back on software. But I suppose nintendo don't have to buy ther eway into your homes unlike some console launches the past decade. Though given the component cost it does lead itself open to being hardware cloned more than say a PS/3 which woudl prove more expensive. But there again some level of control of niche components in some form will help that and I can't see Fujitsu or even Toshiba upsetting there big customer by selling to some clone manufacturer - if indeed they have the volume to accomodate anybody else currently.
One question I do have - if they spent more money on components - how much better of a user experience could you get.
price on launch of a new product = 3 times the bill of materials? Sounds about standard to me.
PS/XBox sold at lost
However, the XBox and Playstations originally cost more to manufacture than MS/Sony sold them for. There was hefty charge to the games company for 'approval' and the signing key needed for the console to run the game.
And how much do the components of the components cost?
The shiny 3D screen is $33.80 to buy in from Sharp, but I doubt it costs Sharp that much in bits...
Breaking News !
Nintendo have lost their charitable status and have reverted to being a company that makes money for their shareholders!
Age old saying
"Everything is worth what its purchaser will pay for it." - Publius Syrius
It could cost £5 in parts and be assembled for pennies by children in a chinese sweatshop (In fact that second bit is probably closer to the truth than they'll admit), but you could still sell the things for £100+ because the general public are always willing to pay the money for stuff like this.
..they could be keeping the price artificially high so that they can *ahem* lower it when Sony release the NGP this winter. This probably also explains why the release games aren't the big guns we'd hoped for: "Hey look! The 3DS is now £30 cheaper and Mario Kart, Lylat Wars and Super-Super Mario 3D Extreme Makeover are also released!!"