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Analyst Estimates 3DS Raw Materials Cost Just Over $100

Analyst Estimates 3DS Raw Materials Cost Just Over $100

March 24, 2011 | By Kyle Orland

An "preliminary estimate" of the cost for the raw hardware inside Nintendo's new 3DS portable values the guts of the system at just over $100.

An analyst from Gamasutra sister company UBM TechInsights tells Eurogamer that the components inside the system cost Nintendo $101 per unit, or $15 more than the Nintendo DSi.

The number would mean Nintendo generates a substantial profit from the sale of each 3DS, which retails in the U.S. for $250. Those profits would go towards recouping marketing and research and development costs, as well as general labor, packaging and distribution costs.

Last June, Nintendo president Satoru Iwata said he didn't expect to sell the 3DS below production costs. The Nintendo Wii was profitable when the system launched, according to Nintendo of America president Reggie Fils-Aime.

But many hardware makers initially sell systems at a loss in an effort to increase potential profits from software licensing fees.

A report from market intelligence firm iSuppli estimated Microsoft didn't start generating profits on Xbox 360 hardware sales until roughly a year after the system's late 2005 launch.

Sony, on the other hand, was estimated by iSuppli to be taking a $300 loss on each PS3 at launch, despite the system's initial $500 to $600 retail price. The firm said the redesigned "slim" PS3 hardware was "rapidly approaching profitability" by the end of 2009.

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