Analyst Group: Nintendo 3DS Costs Just $101 To Manufacturer [UBM Analysts Say That The Nintendo 3DS Costs Nintendo Just Over $100 To Make, So Why The £230 Price In The UK?]

Tweet

When Nintendo introduced the pricing of the Nintendo 3DS, we were all a bit shocked at how high it was. It’s easily one of the most expensive Nintendo products in years, but with innovations like 3D and more powerful hardware, it must cost more to make, right? Not so fast. Analyst group UBM TechInsights has torn down a Nintendo 3DS, and they believe that it costs Nintendo about $101 per unit to make. So why is it so damn expensive, especially in the United Kingdom where it sells for £230 ($371)?

In the United States, the Nintendo 3DS is going for $250, which is still a healthy Apple-like product margin for Nintendo over the alleged $101 production cost. But, the real outrage for this seems to be coming from the UK, where gamers are paying on average between £200 and £230 for the device. Why?

If you remember our coverage of the Nintendo European press conference, they announced that they would not be setting a pan-European MSRP, and instead it would be up to each retailer to set the price. This why some stores like Tesco are selling the Nintendo 3DS for just £175 while others like GAME are selling it for £202. Nintendo and the retailers won’t announce what the wholesale price of each Nintendo 3DS is to the retailers, but sources tell website Eurogamer.net that Nintendo is charging about £170 per Nintendo 3DS for UK retailers. This means, that some game shops in the UK that are charging £200 and £230 for the Nintendo 3DS are making huge profits on the console, minus VAT, of course (I’m American, we have no idea of how VAT works).

What strikes me about this is that usually with new consoles, nobody is making any profit. Manufacturers often sell at a loss or razer thin margins in order to get an install base of users out there to buy games (where they make money on licensing fees) and retailers often sell at razer thing margins themselves, in order to differentiate themselves from the 12 other shops selling the same thing (this is why you often see crazy pre-order bonuses). Yes, it looks like some UK shops are taking huge profits on the Nintendo 3DS. Except for supermarket Tesco, who is selling the Nintendo 3DS for just £175 with a purchase of a new game. That’s £5 above the reported wholesale price. If I lived in England, I know where I’d buy a 3DS.

Tweet

You may also like:

Amazon Kindle Costs $84 to Make...

Nook Tablet No Threat To iPad, Say Analysts...

Amazon Kindle Fire Costs $201.70 to Build - IHS iSuppli...

webOS: HP Will Make a Decision in 2 Weeks...