This amount also includes the cost of the tablet-esque controller, which accounts for about $50 of the total amount. The source has also said that Nintendo is assessing the overall market and confirming costs to determine the new console's final price, which will be at least $300.
Cutting production costs to maximize profits is Nintendo's main concern with the Wii U, the insider source told Forget The Box. They are cutting costs in the Wii U's hardware to build back confidence in investors. Nintendo wants investors to view Wii U as a less risky proposition.
The cameras in the Wii U's new controller are also said to be better than preceding Nintendo products.
The cameras in the Wii U controller are an estimated manufacturing cost of $6, the source said. They are slightly better quality than the 3DS and DSi cameras. The touch screen has a manufacturing cost estimated at $14.
Although these individual prices may not seem like much, the overall retail cost will be much more expensive. A similar report form 2010 details the production costs from Microsoft's Kinect , which said that the per-unit cost amounted to $56. The motion censored gameplay device was sold for $150.
This isn't the first time Nintendo has priced their products for more than the manufacturing costs. The 3DS, a handheld gaming console with 3D display, hit stores with a price tag of $250. But according to the HIS Suppli Teardown Analysis Service, the materials only cost $100.71.
However, additional costs such as software, shipping, marketing and promotion, packaging, and transportation were not included in this figure. This could account for the higher price, which for the Wii U is almost double the manufacturing cost.
Nintendo will also be shifting in a new direction in terms of the way content is purchased for the Wii U, the source said. The company is looking to keep up with competing consoles while keeping hardware costs down. The GPU and CPU hardware will be at a bargained price, and was deemed as economical, but is still fit to compete with other gaming systems on the market.
There is a bigger focus on downloadable content, applications, video content, digital distribution, and services to create a stream of revenue, said the source. Investors will be ecstatic with the news.
But with other rivals releasing their next generation consoles this holiday season, it will be interesting to see how the Wii U plays out. Microsoft will be launching its successor to the Xbox 360, which is rumored to be called the Xbox 720, and Sony is working on its PlayStation 4, known internally as Orbis.
The upcoming Nintendo console is said to feature 720p display, with simpler titles such as Mii-based games, sporting 1080p.