Why the Nintendo 3DS costs £230
Nintendo's new handheld ripped open and costed up.
"An absolute outrage!"; "Shameful exploitation"; "I love living in rip-off Britain". Just a small selection of reader reaction to the news that the 3DS would sell for around £230 when it debuted in the UK.
Although a number of brave retailers now offer it for £187 following a furious tit-for-tat price war, that's still considerably higher than either the DS (£129.99) or GBA (under £100) when they hit the shelves, not to mention substantially more than the $250 (around £165) that US gamers will shell out for the device.
So, are we being ripped off? Or is Nintendo – and your chosen retailer - offering consumers the best possible value for money given what the machine is capable of?
Perhaps unsurprisingly, Nintendo itself would have you believe its new box of tricks is worth every penny. Back in January, Nintendo UK boss David Yarnton told Eurogamer that the 3DS is "really good value".
"The fact it's a 3D entertainment device – you can't get anything that's 3D at that sort of price without having to wear glasses as well. Get that one in."
By and large, retailers and industry analysts agree.

The 3DS uses a new graphics processor designed by relatively unknown company Digital Media Professionals.
"I have no concerns that the £220 price point is sufficient," EEDAR analyst Jesse Divnich says. "The 3DS is a beautiful piece of technology, one that all core gamers should experience. I don't foresee the £220 price point hindering any purchases."
Wedbush Morgan mouthpiece Michael Pachter has no problem with the figure either.
"I'm sure people will complain in a really tough economy, and I don't blame them - it's clearly expensive. However, the fact is the device will be in tight supply, with probably fewer than 500,000 available for the UK market, and so Nintendo is charging what it thinks the market will bear."
HMV marketing chief Gennaro Castaldo also sympathises with gamers, but added that in the long run, the tag is just about right.
"I can see why it sounds like quite a sum of money to some people, but we're talking about brilliant new technology here that will have cost many millions to develop, so it's understandable that Nintendo and other parties involved feel a need to make a return on it," he tells Eurogamer.
"Also - think how many times it will be used and enjoyed over its lifetime, so as players we'll end up getting a great deal of value out of it over a number of years. Very little comes cheap in this world, and we all know that if you want something of real quality, then you have to pay for it."

Nintendo are once again using their own proprietary ARM processor.
As Castaldo says, Nintendo's desire to make a profit on the gadget is perfectly reasonable. But how much, exactly, is it raking in?
According to a "preliminary estimate" handed to Eurogamer by David Carey, VP of technical intelligence for UBM TechInsights, the cost of the system's raw materials comes in at $101 per unit (around £61.76). That equates to around a $15 (around £9.17) increase over the DSi, which launched in 2009 for £149.
Compare that to the 3DS's initial £230 asking price and you wouldn't be blamed for smelling a rat. Bear in mind though that the DSi was released relatively late in the handheld's phenomenally successful life cycle, at a time when Nintendo could afford to take risks, having already made back a significant wedge of its original R&D investment.
Of course, on top of the raw materials there are also a number of other costs to consider, such as labour, marketing, packaging and distribution, not to mention those sizeable R&D costs to recoup. Naturally, Nintendo won't reveal what its margin is or what it charges retailers per unit. However, a reliable retail source tells Eurogamer the going price is £170.73.
It should be noted that, when approached with that figure for clarification, a Nintendo spokesperson replied, "Total rumour and speculation - no comment." However, if that £170.73 figure is accurate, that means Nintendo is pocketing around £108.97 per unit sold.
And what of retailers' cut? Even for those still offering the handheld for £220-230, it would seem there's very, very little money to be made for the humble shopkeep.
On top of the buy-in price Nintendo demands, retailers also have to factor in 20 per cent VAT – which goes some way to account for the difference between the cheaper, but taxless, US price.
If retailers are paying £170.73 per unit, VAT takes it up to £204.86. Then there are labour costs to consider. That's tough to put a figure on, but a general rule of thumb dictates that between 15 and 19 per cent of all retailers' revenue goes on paying staff. Even at the conservative end of that spectrum, a shopkeeper isn't going to see much change from £230.
That figure might surprise you, but bear in mind retailers don't expect to see a great deal of profit from hardware.
"Little known fact, the margin on hardware for retailers is incredibly small," points out Divnich. "Retailers make the profit on the games and accessories. Typically retailers see a 20 to 25 per cent margin on the games and 40 to 60 per cent on the accessories."
Even so, it would seem that those brave vendors offering the device at £187 will take a massive hit in the name of grabbing market share.

Atheros supply the 3DS' custom 802.11n/Bluetooth IC (AR6014).
"By the time you take into account the VAT and various other bits and pieces, [retailers charging under £200] will not make a brass penny piece," clarifies Don McCabe, CEO of the independent CHIPS retail network. "Even for an online outfit, it's still going to cost them money to sell it for under 200 quid."
McCabe insists that retailers willing to sell the 3DS for less than its designated value are doing a disservice to Nintendo, the device itself and the industry at large. Essentially, he argues, the 3DS is actually worth a great deal more than the £200 many of you have probably already put down.
He reasons that smaller retailers need to make some profit on the hardware, so if national chains and online stores undercut them they're less likely to stock the product.
"It means that consumers won't go hands-on with the machine," he explains. "You don't get hands-on via mail order and supermarkets very rarely do demonstrations.
"What happens is, your early adopters are going to buy the machine come hell or high water. It doesn't matter whether it's £200 or £230, they still would've bought it. But early adopters will not make the machine. It's wave two and wave three that make the machine and the only way that's going to happen is if people see it, feel it, touch it. 3D is very difficult to get across in a TV advert or in a newspaper. People need to experience it."

The device's gyroscope is provided by InvenSense (ITG-3200). Typically, ST Micro has won every major slot for this award.
"We saw it with the Dreamcast. A critically acclaimed machine, but only the early adopters took it on, and it died," he continued.
"For a machine to grow and be viable, it needs to go beyond the early adopters. The actions that the Tescos and the mail order people of this world take have a detrimental effect on that."
McCabe also argues that such heavy discounting prior to release sends a message to consumers that the machine might not be all it's cracked up to be.
"What does that tell you as a customer if a product is discounted before it hits the shelves? If you see one retailer selling at £230 and another is selling for £197, you think, what's going on here? Is it not as good as it should be? Is one retailer dumping their stock?"
Judging by the record-breaking pre-order numbers and strong Japanese sales, that's not a concern many gamers seem to have acknowledged. If you're still weighing up whether the 3DS is worth your hard-earned cash though – the second and third waves as McCabe puts it – you'll have to decide whether Nintendo has earned its £100-odd profit. Over to you.
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Comments (90) Latest comment 11 months ago
Comments threads automatically close after 30 days, but please feel free to continue chatting on the forum!
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Also i might try and hold of a year for the inevitable upgraded model whatever that maybe, but your fooling yourself if you dont think theres going to be one, after the yearly instalments of DS hardware.
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I don't really care if a retailer is selling a product for less than the RRP; that doesn't make me think "ooh, why is it being discounted?" "is it crap?"; it makes me think "bargain. Now that extra £30 I saved by not buying it somewhere else can be spent on a game instead."
Also, a better price point surely makes the machine a more attractive prospect for both early adopters and the fabled 'second wave', and something more people are therefore likely to invest in.
His argument that big companies discounting the hardware doesn't really mesh well witht the fact that retailers don't make much from sales of the console itself, but get profit from selling games and accessories. In that case, isn't it in everyone's best interest that the price is lower, as that means more customers, and more potential game sales for both big retailers and smaller independent ones?
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http://ww w.dvdreviewer.co.uk/Forums/Gami...
http://ww w.pocket-lint.com/news/3392/nin...
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Nintendo like all companies have a right to look for a profit, it'll be interesting to see how much Sony are prepared to LOSE over the NGP because they sure as hell won't be making a profit if their £250 price tag is to be believed.
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Lowering price affects the perceived value, which can affect the desire for the product.
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I can't put £230 on anything at the moment though, especially a handheld.
I also feel like a lot of that price is the 3D, and it's really not enough. I would pay £250 for the NGP though, as that looks like it's worth £250, if it even is that. I suspect it'll be more.
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Well it has hindered my purchase.
Elements of the article makes it sound like we should be thanking Nintendo for the price and should in fact be handing over more money than what is being asked.
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.. but when I can get a 3DS + Pilotwings for around £185 at Tesco Entertainment ..vs £270 at an indy retailer.
I'm going to get it from Tesco's.
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Retailing at £149.99/159.99 would still have made Nintendo a healthy profit in the long run given the success of the 'DS' branding. Corporate greed ftw.
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Though admittedly my answer is less interesting than your article, which I very much enjoyed
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Pricks.
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Why do you think apple don't discount at launch?
That said, the initial price was way too high. It should have been £199 rrp, no more.
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Yes it is Stuart. Until of course a AAA title is available at launch, then we'll use the unwieldy phrase, "must have product" .
Twats like you and I would then be in there like a rat up a drain pipe.
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Personally the value for money over time aspect rings true. I've had more fun with my DS and DSi than any other consoles over the last 6 years (and I'm currently rocking the trinity under my TV). Hell, between Pokemon Diamond/Gold/White alone several days of my life have been spent on the thing, and this is without factoring in the FF and CT Remakes, the Mario and Luigi series, Mario Kart, the list goe's on. Maybe I will want to shell out another two ton within 18 - 24 months for a brighter screen and more battery, but do I want to deprive myself of the fun i could have with a 3DS in the meantime, no.
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It would have had an outside chance with me if it had retailed at £129.99 with a game....so for now...it can go swivel.
I just bought Might & Magic 8 off gog...for £3.69. How can you go wrong ? I realise this was a totally unrelated subject, but I just thought you should know.
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put outdated at release date tech inside, make sure it has mind catching gimmick , sell with shitload of profit margin.
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Clicking on the link, I was expecting pictures of a mirror with lines of cocaine, expensive cars and high-end hookers. Dissapointed!
(waiting on amazon to ship my 3DS, dammit!)
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While there is some markup from Nintendo there, absolutely everything is cheaper in America. I'd imagine economies of scale may come in, then there is just the fact that America is a cheaper place to do business. Plus, the cost of living is significantly less there (along with wages) so you can't do a straight comparison between the two.
I don't know how it works in this case but the same goes with Australia in the opposite direction. The cost of living/wages is higher there than here, so generally things are more expensive.
It's very hard to do direct comparisons between different countries for this very reason - the same goes to everything from this console down to a pint of milk.
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Oh and not honour warranties with batteries dropping to half power capacity after 2 months.
Also charge 4x what the unit cost to make.
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Exactly. Yet another thing in Europe that's massively more expensive than the US, as if we should feel priviliged they actually released it in Europe at all. McDonalds, fuel and now the 3DS
But seriously, what I can't understand is shouldn't Nintendo be tempting as many customers to be early adopters as possible with a low price tag so there is a good sized user base to sell lots of games to, both now at launch time and always? Wouldn't this sales strategy carry huge exponential benefits?
This price tag, especially in comparison to the US price tag, just makes me think they are trying to make as much money back on the 3DS as quickly as possible, fuck off with your money, stop selling the 3DS, and then tell you that you must buy the 3DS ver 2.
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Jon
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Answer: price gouging.
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The profit Nintendo makes on each unit is eye-watering mind. Almost seems pointless to even stock the things!
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I'm not saying that is right or wrong thats just how i feel about the hendheld.
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:-/
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I don't think we're being ripped off signigficantly more than the US, though it really doesn't seem to be worth nearly £200 on closer inspection.
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It does? *checks his order* Nope, paying £180 here.
Anyway, profit profit profit. I think one distinction should be made with Nintendo - Sony and Microsoft (and Sega before them) made a lot of their money on licensing agreements and in-house studios. This helped offset machines priced at a loss to penetrate the market early. Nintendo don't churn out masses of games themselves, so their profits must come from somewhere - and if they can put together a clever console, why begrudge them? I mean, people mention Apple - yeah, they are overpriced but they get away with it. People pay that sort of money. End of.
It's early days - there is never a guarantee something can fly or flop. But Nintendo aren't the only people to set the prices, retailers have their part to play and that's usually when prices start to fall - I'v e no doubt this time next year it probably will be £129.99 - another £50 off. It's up to the individual early adopter to ask themselves if they can get that £50 worth back in entertainment on the handheld - that's less than a quid a week, and I've got two Resident Evils to look forward to, the 3D/HD reloving of Ocarina of Time, Mario Kart, Kid Icarus...
I doubt I'll be crying over that £50 this time next year... but if I have any criticism, is that for me - personally - I think the launch lineup isn't quite as strong as it could have been - I will enjoy DOA and Pilotwings, but I suspect I'll be playing Pokémon or Okamiden on it in the next few months until the good stuff is released... that's not necessarily a bad thing. But for all the big names lined up for its first year, it's a pity we didn't see a much, much stronger intitial launch lineup...
But that's my opinion.
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Utter bilge - the DC ( which I loved ) didn't succeed because it had an excruciatingly painful controller unsuitable for long periods of play and it's games were pirated to hell and back.
As for the price comparison that's bilge too. I have no doubt Ninty are making a profit on every 3DS sold ( they've done that with most machines they make including the Cube ), but it's totally disingenuous to only estimate the parts cost, when there will be a crazy amount of additional costs on top of it. Anybody in the manufacturing or tech industries must be well aware just how minimal parts costs are compared to labour, RnD, distribution, sales, marketing and a whole host of other things.
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They didn't. ARM sells licenses for its processor architecture as well as complete processor designs - most of today's smartphone CPUs incorporate an ARM core yet they are built by Samsung, Apple, TI etc.
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It costs as much as people are willing to pay for it.
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perhaps i'm wrong but the r&d costs would have been offset against corporation tax bills on previous profits.
at the end of the day everyone is in business to make money and a product sells for its perceived value.
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It costs as much as people are willing to pay for it."
Exactly. Nintendo announced (a while back) that the 3DS price was raised after the positive reception at E3 2010.
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like iPad. Its expensive, and you got less. Got more if buy the other brand. but despite expensive, people still love to buy iPad.
maybe if nintendo can do this apple do with their product, Nintendo can sell expensive console and people will still buy buy buy.
but for myself, as long as my money not enough i wont buy it.
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The 3DS isn't cheap but there's way bigger rip offs out there that are much harder to avoid!
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As a consumer, you definitely cannot get your VAT back. Businesses yes, but I think it would be hard to justify the 3DS as a business expense!
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The 3DS has a 5 year old PICA200 CPU / GPU which has poly draw rates barely better than a PSP. The 3D screen is just a parallax barrier over a regular LCD and probably costs a couple of dollars to produce. I think it's very clear that the device has a large margin of profit built in from day 1 and there will be plenty of people lined up to buy it.
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As stated in the article, the £230 includes VAT, whereas the $165 doesn't include sales tax. That drops the price down to £192. If you go with the £180 price lots of people are paying, then it's actually costing £150.
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"This price tag, especially in comparison to the US price tag, just makes me think they are trying to make as much money back on the 3DS as quickly as possible, fuck off with your money, stop selling the 3DS, and then tell you that you must buy the 3DS ver 2."
Large firm in trying to make sizeable profit shocker!!!
High prices are the norm for new tech and who ever said that you "must" buy any iterative upgrades of consoles?
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I know about ARM.
It was the wording of the caption that I was having a pop at.
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Jeez, early adopters are tagged as twats, and the tech is all gimmick, apparently.
Seriously, it's amazing technology. Worth the price, because you're not going to get it anywhere else. Battery life, sure, but people don't usually use all 4 hours in one go as it usually lasts for me.
It's a shame, because this is a piece of hardware priced at what it's worth -- like the PSP, initially (after it's release, the software halted to a trickle, lowering the hardware's value).
Argh, I hate to go against the tide, but man I love my 3DS. StreetPass is really fun, too, especially if you're in a metropolitan city (Tokyo, for me).
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REALLY EG?!?!?
Are you REALLY that clueless as to not understand how global economics work? Why do an article on whether or not something is overpriced - when you clearly dont understand the simple legistics of it all?
Oh brother.... My mind sometimes just cant handle peoples stupidity on the web.. it really cant.
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"What does that tell you as a customer if a product is discounted before it hits the shelves? If you see one retailer selling at £230 and another is selling for £197, you think, what's going on here? Is it not as good as it should be? Is one retailer dumping their stock?"
I'll tell you what is says to a customer............ Nice try GAME, thank god for Amazon. Another thing, the reason the Dreamcast failed was the PS2. Nothing more, nothing less.
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In comparison to what other companies sell their hardware I think the price is fairly reasonable. R&D costs are probably higher if you intend to incorporate a 3d display and all the challenges associated with it. If you look at how much the totally risk-free iPhone 4 costs when you add up the parts you also get nowhere near the RRP, in fact the gap is much higher.
However, I am not blaming anyone. If people are willing to pay and the demand is there then companies should charge whatever they want. After all it still is luxury.
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I'm disappointed with the Nintendo 3DS not because of its pricing but its specification I didn't want it to be cheaper I wanted it to be more powerful for that price. £200 would have been fine if the processor was 1ghz with a 333mhz gpu, 256meg of memory and a higher resolution screen but because its spec is soo low it will limit the games it can achieve which I think is a shame. I totally understand Nintendo's desire for profit and if they can get away with it then all credit to them but I think the hardware is very disappointing to a lot of gamers as was the specification of the wii.
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when Nintendo release a handheld with one innovative feature, analysts call it acceptable? hmm
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Price comparisons by countries PPP and what the price would be if the US had prices like in the UK etc...
Country / Price / Price PPPed / Country PPP
Germany / 350$ / 460$ / 35,930$
UK / 323$ / 434$ / 35,053$
Japan / 308$ / 430$ / 33,828$
Australia / 350$ / 415$ / 39,692
Croatia / 430$ / 1150$ / 17,608$
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Still, I suppose it's nice to see a games company shafting retailers for once.
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GLOBAL EXCHANGE RATES CHANGE DAILY!!!
The US-UK exchange rate today is different to a year ago. Do you REALLY think a GLOBAL company like nintendo is REALLY going to be changing the price daily based on the current exchange rate?!?
I moved stateside a few years ago.. i could get more double the amount of double the number of dollars to the pound as i can get now... Think people!
And that's BEFORE you factor in the fact that distribution/retailers/etc all take a HIGHER cut in the uk. Hint - take a look at how much fuel costs in the uk compared to the US (for example).
*sigh*.
But no.. yet again people just look at the US price and stick it in a calculator at todays exchange rate - without a f-ing clue about how world trade works and go on moaning about how they're being "ripped off".
This happens on pretty much ANY console release.. And every time people just dont get stuff they REALLY should've learned by the age of 12 at school.. But more recently it's been worse for japanese companies releasing in the uk.. Why do you think that is? Hint - look at the value of the japanese currency.
Sheesh.
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<em>"However Nintendo are also living in a bubble if they think high price doesn't suppress demand. That's one of the most basic, fundamental rules of economics."</em>
Nintendo knows that a high price suppresses demand. They're just betting that demand is still going to be high enough at the high price tag.
What I don't understand is why people complain about the launch lineup. Afaik, it will have Ridge Racer, Pilotwings, Street Fighter, Nintendogs, that original Ninty submarine game, Lego Star Wars, The Sims 3, PES, That X-Com Ghost Recon game, Super Monkey Ball, Splinter Cell, and Rayman. How is that not respectable?
I'm interested in getting the 3DS myself, but it's interesting how traditional the thing is. This is the opposite strategy of the one Nintendo played with the Wii and DS; this is all about "traditional games are awesome and worth the money" rather than "we need to experiment with new forms of input to reach a broader audience".
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Street fighter for gods sake, played since the EDO days LOL, and cube games I almost forgot what they looked like showing my age.
Where is the software, not paying good money for vintage games that are better memories than reality.
I fondly remember road rash on the 3DO, best racing game ever, yet looking back on Google and its a blokcy crap mess - strange what nostalgia hypes you into believing old games are better than they where.
All these re-releases should be a few bucks only !!!!
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24/03/11 @ 12:05
Sorry ...
.. but when I can get a 3DS + Pilotwings for around £185 at Tesco Entertainment ..vs £270 at an indy retailer.
I'm going to get it from Tesco's.
Or, because supermarkets would like to put the indies out of business, buy the 3DS from Tescos then get the game somewhere else (they'll probably be cheaper online anyway), and fuck the supermarkets over.
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Great post
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Their 3D hand-held is the equivalent of 'malibu stacy with a new hat' (Simpsons reference).
they release new hardware to much 'hoohaa' from the specialist press...
then the only games that don't suck a megatonne of balls are the in house updates of the same franchises they've been milking for years.
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two fo the biggest names on that list were Square Enix and EA.
add that to an already struggling Sega... after the failure of the Saturn...
and with Gamecube and Xbox on the horizon.
Sega did the smart thing and left the hardware arms race.
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You may not be very popular round here, but I agree. Anyone considering getting a 3DS at the prices being bandied about is a complete twat of the worst order. I have never spent that much on a console - let alone a handheld console - in the 35 years I've been gaming.
The fact that so many people seem so willing to suck those prices down makes you wonder when the recession and cuts really start to bite what they'll be willing to give up.
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Come on.. that's no way to talk about stuart.
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Oh okay, £180 to suppliers minus the COST OF RAW MATERIALS £80 = £100 profit
Say what?
If only costing were that simple
@smelly +1 from me mate - This article is Clueless!!
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Unless of course if you are content with just playing last gen handhelds(DS or PSP), one of which(PSP) is just a tad cheaper then the 3DS.
But those two handhelds only have about a year left before the games will pretty much have stopped coming out for them.