Nintendo Possibly Taking a Loss on Every 3DS Unit Sold

Chris Burns - Jul 29, 2011
Nintendo Possibly Taking a Loss on Every 3DS Unit Sold

Yesterday many things were revealed about Nintendo, facts about their abysmal earnings this past quarter, the fact that they had “few hit titles,” and of course, most importantly, that the price of the Nintendo 3DS had been slashed to $170 from its original $250. Upon further analysis of the earnings call just hours ago, Nintendo’s CEO Saturo Iwata appears to have revealed that the gaming company may be taking a loss on every 3DS unit sold with the cut. While some reports have Iwata saying that Nintendo’s price cut for the 3DS was necessary and would improve the company’s balance sheets this year and next, others have reported that he, in one set of words or another, said that Nintendo is now taking a loss on ever 3DS unit sold.

Research firm IHS iSuppli has done a teardown of the device in question and has noted that the total cost of materials put in to each Nintendo 3DS is $100.71. With this and manufacturing cost added in, this number is raised ever so slightly up to $103.25. After this, TechRepublic puts the wholesale price of an item at about half of the retail price. This means Nintendo is selling the units to retailers at just $85 per unit. If this is all we need to consider, says PC Mag, then Nintendo, according to the math, definitely is selling the 3DS at a loss – and by quite a considerable amount – they also suggest that if Nintendo’s partners are willing to take a lower share than is average as a larger volume is sold, the gaming group may still be coming out on top.

And what about the gamers who purchase the gaming device when it came out, you may be asking if you’ve not yet taken a loot at the original article with information about the price cut – what about those dedicated fans of Nintendo hardware? They’re being given 20 free game downloads from the Nintendo eShop. What a prize! For those of you now considering purchasing the 3DS because of the price drop, check out our original Nintendo 3DS Review and discover what you’re missing!

What do you think? Does it make sense for Nintendo to sell the 3DS at such a low price to possibly make ends meet until 2012 when they’ll release a whole new line of products including the Wii U? Or will this end up being one of those really, really bad ideas like the original Virtual Boy?

[via PCMag]

Must Read Bits & Bytes