Eurogamer was given a preliminary estimate by UBMTechnologies.com concerning the total cost of the components that make up the Nintendo 3DS. According to the research company that broke the machine down and did the sleuthing, the sum cost of the parts of the 3DS comes to around $100 USD.
That’s a far cry from the $250 launch selling point.
Before you head to the shed and gather your large collection of pitchforks and torches, there are a few things you should consider. Nintendo isn’t just paying for the parts. They’re paying for the research & development of the machine, the labor that puts it together, the factories that house the labor, the marketing that sells the device and the packaging it comes in. The $100 cost of parts is only a chunk of the picture where the 3DS is concerned.
One would have to imagine that Nintendo had to dip into the well of money created by the Wii’s success in order to back the initial research & development that went into created the 3DS itself. From that point, the margin of profit from cost of manufacture to MSRP is all gravy. Nintendo is almost definitely pulling positive profits from every unit that sells, but by how much is not known. Rest assured, it isn’t the $150 difference that stands between the cost of the components and the price of the device at retail.
Making money on a console at launch is a huge achievement. Microsoft and Sony have lost money with each sale over the course of launch. The intention of hardware manufacturers is to get the device out into the hands of the public and then make money on the consistent library of games. And that’s why console companies probably want longer life cycles for their hardware… to make more money on already manufactured goods.