Analysis: Manufacturing cost and estimated sales of the Gateway 3DS (and other 3DS Flashcarts)

A few days ago I published an article where I criticized the Gateway3DS team for having intentionally injected malware in their flashcart for the Nintendo 3DS. One of the thing that annoyed me is how most of the people buying the Gateway 3DS products almost described the Gateway team as “white knights” or “devs dedicated to the scene”. Set aside the flamewar-inducing tone of my article, I mostly wanted to open people’s eyes on the huge market and margin that the flashcart business is. As I mentioned, the Gateway team are looking at a potential benefit of millions of dollars, they are clearly in the business for money and not to “help the scene”. Good for them, but I just wanted to stop the myth that these guys are here for “the community”.

Now, when I mentioned millions of dollars, some people rolled eyes and said I basically pulled the numbers out of thin air. I’ve gone back to my research and came back with more precise numbers to prove my claims.

1. The market

It is difficult to estimate the number of 3DS flashcarts that have been sold and will be sold. However, solid data exists about Nintendo’s previous console, the NDS, and its levels of piracy: In 2008, the number of NDS Flashcarts in circulation was estimated to be about 1 million[1]. At the time, there were about 80 millions Nintendo DS sold around the world[2]. This means it is estimated that about 1.25% of nintendo DS users owned a Flashcart.

The ease of use of 3DS flashcarts is pretty much the same as their older sisters, minus the fact that they are not compatible with the latest firmwares, but people who want to pirate know about these limitations and tend to not update their 3DS. I’m extrapolating the NDS numbers and will assume that 1% of 3DS owners are owning or planning to purchase a Flashcart. With 35 millions 3DS owners worldwide in 2013[3], we are talking of a market of 350’000 units for Flashcarts. The Gateway 3DS sells for about $80 (a bit less in the US, a bit more in Europe where it is not unusual to see it sell for EUR 80), so we are looking at a market of 28 million dollars.

2. Manufacturing/recurring costs

Of course, the Gateway 3DS and its clones costs money to produce. If we want to calculate the benefits made by the cards, we need an estimate of the manufacturing cost, shipping costs, marketing costs, retailers share, etc…

Although the numbers are (of course) not public, it is easy to find information about the device itself, what components it is made of, etc… The manufacturing costs are reasonably easy to compute.

First of all, the Gateway 3DS is apparently (I do not own a Gateway3DS or a 3DS) made of 2 cards: one for the “old” DS mode, and one for the 3DS mode. The old DS flashcart costs close to nothing to produce. It is actually possible the Gateway 3DS team get those for free, surplus from the NDS era. But let’s assume they pay for it. Chinese professional retailers sell those for as low as $4 a piece if ordered in bulk.

So that’s it for the DS card, now let’s focus on the 3DS card.

gateway3ds_pcb

  • The main component on the Gateway 3DS is an Actel A3P125-VQG100[4]. Those sell for as low as $3.5[5].
  • The PCB itself, given its size, can be manufactured for $0.5 or less[6]
  • Assembly of all the components is the expensive part and can cost up to $5[6]
  • Throw in $2 for additional components on the card (although those can come for free if one has a good contract with the PCB assembly factory) and the casing

So we’ve got a manufacturing cost of $11 for the 3DS specific part of the Gateway 3DS.

Add to that the $4 price of the NDS card mentioned above, and a grossly inflated $5 for stickers, packaging, and some shipping, and you’ve got a total price of at most $20 for each Gateway3DS. More realistically, the price must be somewhere between $10 and $15, but let’s say $20 in case I forgot something huge, and to not be accused of underestimating any cost.

 

3. Fixed costs And intermediates

Manufacturing costs are not the only costs involved in creating the flashcarts.

There are of course initial “R&D” costs to find the hack, implement the device, etc… Those are extremely difficult to guess, but I’m going to give an estimate of $200’000. Where does that number come from? You can see it as $100’000 to pay a hacker/developer for a full year of full time work + $100’000 for hardware prototypes and a bunch of small things such as buying the website and creating a quick page for it. This value is also on the scale of the price of “kernel exploits” for various Mobile OSes today: see here for some generally accepted prices of hacks for specific devices. Those are selling prices, not costs, so it is fair to assume exploiting the Nintendo DS costs much less than the selling price of an iOS exploit, for example. Hence targeting the hundreds of thousands to be fair without over exaggerating the costs.

To be clear, it could be as low as $10’000 for what I know, but I’m saying $200’000 to be sure I am not underestimating the actual investments, the goal being to get an idea of the lower end of the total benefits when all is said and done.

The next step is the distribution and marketing circuit. How do the cards reach retailers, etc… I’ve already integrated the shipping costs from the factory to the distributor in the manufacturing costs section above, so that part’s addressed.

It is also relatively easy to see the price at which the Gateway is sold from the main distributor to retailers. It goes as low as $50[7], which can be confirmed by the fact that some retailers in China sell the device for as low as $55[8].

This is interesting because it simplifies the rest of the computation a lot: the Marketing costs, affiliates, etc… are all handled by the retailers. Retailers are not the Gateway3DS team themselves, but we know they buy the devices from $50 to $60, and resell it for about $80. Considering shipping, marketing, affiliates, etc, the retailers easily make a $10 to $20 profit on the Gateway 3DS, but that’s not what I want to compute right now. My point here is that the shipping and marketing costs after the card is sold to retailers, is handled by retailers themselves. The gateway 3DS team does close to no marketing themselves, except the occasional update to their website or email, which I have included in my $200’000 fixed costs above.

4. Put it all back together

What we have so far is:

  • Each Gateway 3DS package costs less than $20 to manufacture, package, and ship to the distributor
  • There are fixed investment costs (R&D, marketing, etc…) from the Gateway team estimated to be less than $200’000
  • The distributor resells the card for $50, indicating Gateway sells it to the distributor for less than that. We can assume $40 (which means a benefit of $40-$20 = $20).
  • We are looking at a market of 350’000 units

If we crunch the final numbers, we have:

((Sell price – Manufacturing/shipping/packaging costs) * total units) – fixed costs = (($40 – $20) * 350000) – $200’000 =  $6’800’000

The handful of people behind the Gateway team are looking at potential benefits of more than 6 million dollars through the next couple years.

Lots of these numbers are highly speculative of course, but the magic of this is that you can stretch them a lot and still get insane profit. For example imagine that only 0.1 percent of 3DS users are interested in piracy (a level at which you would really start to ask yourself why game developers and Nintendo think piracy is a problem[9]), we are still looking at a benefit of $500’000 (raise your hand if that’s way much more money than you would make in 10 years of work), and that’s assuming the R&D costs are as high as $200’000 in the first place.

The numbers above also mean the Gateway team need to sell 10’000 units in order to counterbalance the initial investment of $200’000. Again, that value of $200’000 is highly speculative. For example, if the developers are part of the team, it is likely they do not get paid a lump sum, but take a share of the profits instead, at which point the initial investment is less than $100’000, meaning only 5’000 units need to be sold to start making profit.

You’ll also note that at half the price ($40 instead of $80), there would still be a nice profit involved there: imagine them selling the device for $25 to the distributor, the distributor reselling it for $30, and retailers selling it for $40. The Gateway team’s profit is divided by 4, still being more than a million dollar potentially. Undercutting their competitors prices would have been a cleverer way than injecting malware in their firmware? That also shows the business is very profitable for clones that sell for around $60, since those get a huge profit margin as well for close to no risk or investment.

I am trying to not pass any moral judgement here, but the people buying these chips need to realize a huge profit goes in the pockets of those who sell it to them, and that profit margin is completely unrealistic compared to the work and actual investment in the product. This is because you are not really paying these people for their work, you are paying for piracy.

Feel free to flame in the comments :)

 

  • [1] http://www.escapistmagazine.com/articles/view/issues/issue_179/5553-The-Slot-1-Secret.3
  • [2] http://en.wikipedia.org/wiki/Nintendo_DS_sales
  • [3] http://en.wikipedia.org/wiki/Nintendo_3DS#Sales
  • [4] http://gbatemp.net/review/gateway-3ds.79/
  • [5] http://www.aliexpress.com/item/Free-Shipping-5PCS-A3P125-VQG100-A3P125-QFP/846695463.html
  • [6] http://www.bittele.com
  • [7] http://chinadistrib.com
  • [8] http://aliexpress.com
  • [9] http://gamasutra.com/view/news/184609/3DS_piracy_is_a_problem__because_publishers_say_so.php
  1. DigitalChaos’s avatar

    Much Math
    Very numbers
    Wow Profit
    So Pricey
    Amazed

    Reply

  2. hgoel0974’s avatar

    Nice analysis, I’d guess this sort of number crunching is what you’ve studied? Cause really I don’t know anyone who doesn’t specialize in these things would ever think things through so well!
    I’m surprised with how much you cut out from their profits and still the result was a multi-million dollar business!

    Reply

    1. wololo’s avatar

      Thanks for the compliment, but this is absolutely not my field. However I dug a lot for that type of information recently, for this device and earlier for the True blue dongle

      Reply

    2. Acid_Snake’s avatar

      I don’t know about wololo, but in my university any computer engineer must have knowledge of advanced math, statistics and economy, this is the latter. And it’s very simple, calculate the total cost by adding up the fixed cost plus variable cost per unit and use that to calculate how many units you need to ship in to have a benefit, it’s a simple equation:

      units * selling price = fixed cost + variable cost * units

      from there on you calculate “units” to know how many units you have to sell to have benefits, and in the case of the Gateway, it’s a very low number.

      Reply

  3. digitduck’s avatar

    nice post, and it confirming what almost everybody thought. But why is everybody so impressed by this? apple is kind of doing the same thing i thought…

    Reply

    1. wololo’s avatar

      Apple is a legit business, that’s the main difference. Most of the Gateway customers are not realizing the amount of money that goes into Gateway’s pocket. This article is putting numbers on the cost of piracy.

      Reply

  4. keane’s avatar

    Hey! good analysis research. The timing is interesting, basically the z i think talked about vita hardware hacking and dumping cartridges then we come onto 3DS cartridge profits, haha though I know this is just a coincidence since you have explained to people where you got these numbers from your previous article before the ps vita hardware dumping anyway

    Reply

  5. enigma’s avatar

    Not to be that guy, but who gives a rats ass. People are willing to pay to pirate, who cares. Its not gonna stop it by throwing stats out there. Everyone knows manufacturers make bank on things legit business or not.

    Reply

    1. wololo’s avatar

      I was curious about the actual numbers and I think other people want to know, I am trying hard not to be judgemental.

      Reply

      1. enigma’s avatar

        Honestly these numbers probably make people want to get into the business haha

        Reply

        1. wololo’s avatar

          I must admit as I looked at the numbers I kept telling myself “I’m in the wrong business” :D

          Reply

  6. Frezzno’s avatar

    Could you also make a calculation on how much a 3DS game cost to develop? So that we can compare to how much a developer loose to this.

    Reply

    1. wololo’s avatar

      Unfortunately I don’t have that many contacts in the gaming industry, and game development costs can go from almost nothing to hundreds of millions, it is very difficult to gauge. I think the important number here is that for the Nintendo DS, it was estimated that 1% of owners were pirates. Based on these numbers, I don’t even understand why Nintendo or game developers consider this as an issue. My personal take on this is that devs see their sales numbers, see the amount of pirated games, and assume that they would get back these sales if piracy wasn’t involved. Why on the contrary, they should reconsider their marketing strategy to understand why 1% of owners being pirates actually impacts their sales that much. It also means that the remaining 99% are not really buying their game in the first place.

      Some studies showed at some point that on the DS, 10% of the players of a given game had pirated it. Based on the numbers of flashcarts, it means 10% of the NDS base owned the game, including the 1% of pirates. so, 9% of the total NDS owners had bought the game, 1% had pirated it, the 90% remaining didn’t care. That’s where their leverage is, not on the 1% of pirates.

      Not that I am trying to minimize the impact of piracy (it’s still definitely hundreds of millions of dollars going to the wrong people each year if you think of all the hardware mods for all consoles), but that the comparison would be extremely difficult to make.

      Reply

  7. Yifan Lu’s avatar

    Once I saw what the kernel exploit was, I was almost angry at Nintendo. I mean… what? The hackers basically had a free pass there. As soon as they managed to get the ARM9 kernel memory dumped (which they could with a hardware dumper if they didn’t already have an exploit), all it took was a very simple search to notice the bug. I doubt it took a year. Maybe a month at most. Of course maybe another month was spent writing the payload, but still. I wish sony was this careless.

    Reply

  8. Zik’s avatar

    hey wololo. nice analyst of that data. it almost accurate as possible.

    too bad the people who defended the Gateway 3DS won’t be reading this.

    As for the business making for manufactoring the games, it can easily go into millions of dollars.

    This is the possible breakdown of developing the game:
    1. writers
    2. artists
    3. CADD/Animations
    4. debugger
    5. Market departments
    6. producer for physical format
    7. medium for digital content
    8. mass stations for GPU
    9. storyboard
    10. music producer
    11. coders

    I might have missed out on some. or may have neglect it, but when you considered the the fact that gaming industry has come a long way since the 8bits worlds. it isn’t like the 8bits world anymore, where all you needed was the writers, coders, storyboards and producers.

    when you considered the fact that games are nearly made with 3d particles, there are more involved in it, along with paying the license fees for using the engines not owned by the studios as well as other engines like BINK.

    When you also considered it, paying $59.99 + taxes in the USA, their break-even rely on the mass sales breakthrough like BF4, COD: Ghost, COD: BO2.

    If you remember a few years back to MW3 and it initial success, the developer teams are often given bonus if the games are met with rousing success that exceed the expenses, it would be worth it to them.

    but if we were to pirate these right off the bat, it like saying that you don’t appreciate their efforts and telling them to go bak to 8bits.

    this is probably why i’m already losing interest in gamings since it doesn’t gives much replay values and there are many differents issues with the younger generation’s short attention spans.

    Reply

  9. Ryan’s avatar

    I don’t give a damn, seriously.

    It’s easy for people like Wololo to be against piracy. Living in Japan or whatever 1º World Country you other people might be from.

    I live in a shitty 3º World Country(Brazil). Minimum wage here is about $300. The cost of a 3DS XL is about $300 dollars and each game is about $80.

    Try living here for once and let’s see if you’ll keep with this same hypocrisy.

    I’ll make them as profitable as they want. They’re pretty much my heroes.

    Reply

    1. motu90’s avatar

      I can absolutely understand that there are different conditions around the world, but it’s still no excuse to support piracy. It’s very easy and applies to every single person in the world: What you can’t afford you don’t own. I can’t affort the money to visit Brazil at the moment, even if I’d love to. The consequence: I can’t fly, period. I’m not going to steal somebody’s ticket or plane to get there, it is as it is.

      It’s really not my intention to argue with you about what is legit and what is not, but it’s just my point of view.

      Reply

      1. stOneskull’s avatar

        if you could download free tickets?

        Reply

      2. adoublek’s avatar

        Copyright infringement (or piracy, as you call it) ≠ stealing. You have a very naive perspective on the issue.

        Reply

    2. Caio’s avatar

      I’m not sure whether shitty third world countries even count in those companies’ statistics.

      Reply

    3. Ztupid’s avatar

      O_o What are you talking about? Even the people in first world countries are poor trying to make a living. If you think everyone is rich and can afford games, think again.

      If you live in the third world countries doesn’t really apply, considering that companies don’t want to lower prices JUST for the 3rd world for two reasons: people just buy it and have it imported, which would promote regions locks and publishers (like EA, Activision) would lose money if they sell games at a low prices in 3rd world countries.

      and yes, i’ve been to one. seen so many copies games as well as many fake phones, consoles, and whatnot.

      and remember this, even your handheld may get bricked, even if you bought from Gateways themselves. there no guarantee that the codes won’t affect even legit buyers.

      Reply

  10. veelk’s avatar

    Not trying to sound like piracy is good, but it isn’t completely bad either!
    At least in my personal case, a large amount of the games I’ve ended up buying, I’ve played them first either via emulation or a flash cart.
    If the only way to play games EVER was only by the available official ways, which are either buying the full game or downloading a demo, I wouldn’t even own, know or love more than half of my games.

    To put a quick example, Final Fantasy VI.
    Back in the SNES era, I never met anyone who owned this game, and I was barely aware it existed. (FF3 as it was called in USA of course)
    But because of emulation, I was able to find and play this game, and ever since then, I’ve been a full supporter of the game with every re-release.
    Similar things happened when I had a DS flash cart. It was more like a try-before-buy thing for me.

    So it’s not that bad! As long as good games are produced, the people with money will be motivated to buy and support them.

    And then what about inflation? Those old games that start to increase in price until they cost near a hundred or more online. Without piracy, this kinda thing would still happen, and the games would be accessible only to the rich.

    Reply

  11. OR’s avatar

    I own a GW cart and don’t make any excuses about it. I like pirating and for me the $75 I spent was worth it considering the number of games I’ve been able to play with it. I admit though that I’ve been pirating/hacking stuff since the days of VHS and Betamax tapes and have a little bit of an addiction to it. I’m probably quite a bit older than most of the folks on this forum as well.

    Reply

    1. wololo’s avatar

      Well, as I said, I am trying to not be judging. I believe piracy is a personal choice. If you made it knowingly, good for you.

      I just wanted to shed some new light on the business for people who didn’t know about this, not to judge people for their decision to own the device or not, but rather to those who imagine that $75~$80 is a “fair” price given the amount of work/energy spent on the device: it’s not.

      Reply

  12. lum’s avatar

    Problem is, with Gateway’s current technology, they don’t have years ahead of them to make profit. The only customers they will get are people who purposely leave their 3DS at a low firmware version, and this number will only decrease as time goes on. Unless it’s now runnable on the latest firmware, Gateway’s not going to sell them by the masses.

    Reply

    1. wololo’s avatar

      True. I went with the assumption that
      - The firmwares that “don’t work” haven’t been around for a while: there were 80 million 3DS sold before those firmwares were published.
      - people who are tech savvy enough to “know” about things like the GW also know they should not upgrade their firmware.

      Based on that, I assumed 1% of the current user base of the 3DS is a good approximation. Of course, if/when the 3DS gets 100 million users, the estimate I made of 350’000 units will not increase, technically reducing the 1% to 0.33% or something similar; but with a fixed amount for a potential market of 350’000 units.
      So I still think the math works, does that make sense?

      Reply

      1. RandQalan’s avatar

        I know this is a lost cause for you

        The people that pirate games do not see the irony of paying this company for games they could buy with the same money

        Nice info BTW

        Thanks

        They do the math realize it is cheaper for all the games that are compatible and realize they would save money buy using this card

        What they do not realize if that code kicks in they are out of all the games and the 3DS :o

        Reply

      2. Daggdroppen’s avatar

        Thanx for the article! I agree with most of the stuff you write. Gateway and other manufactures will probably find a way to run their card on 4.5 + firmwares. So i think we can count on at least 1 % flash carts just like the ds had! The main problem for them to earn money during 2015 will be the fact that there much progress being made at this very moment on the 3ds homebrew scene..
        Smealum is one of the pioneers:

        https://mobile.twitter.com/smealum

        He is against piracy, will make his code as “piracysafe” as possible. But ppl will figure out how to pirate sometime.. This will however enable ppl to use their sd-cards instead of buying flash-carts. When that happens gateway will loose their income :)

        Reply

  13. Stranno’s avatar

    At least the 3DS/NDS will get dirty cheap with time.

    I want a NEO N64 Myth but 200$, holy shit, its 900% overpriced. And it wont get lower, there is no competition.

    Reply

  14. ghadz’s avatar

    it will be cool if we can see vhbl cartridge on vita! who wants to invest?

    Reply

    1. jake’s avatar

      Naah. I live in NZ. Exploits on psp games are easier here. :(

      Reply

  15. LennyVita’s avatar

    What about all the 3ds systems they ruined with their death code? that is shameful. they don’t deserve the attention of being a legit company. If a person chooses to use a flash card, thats their choice. If they made all this money from sales and killed all those 3ds with their update, i hope they are soon out of business.

    Reply

  16. Sonic’s avatar

    I don’t understand, why are acting like if gateway punched you in the face and you want a full revenge against them. You think everyone is an idiot who doesn’t understand that gateway is over priced? I know from the beginning that it is over priced but they are over priced because they are the first one to come out with a hack in the market with a 3DS hack. Your being weird here wololo, either your just getting mad because you have personal issues with gateway or maybe just because you hate piracy that’s why your “flaming” so much. On the other hand I say that I believe everything you say and it’s all true then tell me what should I do then? Where can I get a 3DS hack then???

    Reply

    1. wololo’s avatar

      Can you clarify where you are seeing “revenge” , or “flaming”, in this article? Please quote exact sentences from my article. I believe I have been extremely cautious to not judge anything here, just to give numbers. I was being interested in knowing the numbers, I do not own a 3DS or any Nintendo product, so I do not seek “revenge” on anyone here, just tired at people who think these people are the “good guys”.

      Reply

      1. Sonic’s avatar

        lol this is “flaming” wololo. Getting angry because people think they are the good guys. They are hackers too and I know that they are earning money through hacking but what you gonna do when they are the first one to come out with a 3DS hack. I mean they can place any price for now. I would also not buy their product if there were some cheaper and better hacks available for 3DS but there aren’t any. Besides just to be clear I support you guys as well. It’s not like I’m their fan boy or something. If they put a blame on your I would take your side as well support you fully. I’m using your TN-V7 on my Vita and It’s great. I’m also a gateway user and I think their hack is pretty good and in the future it’s just gonna get better. The main thing is we can’t blame them unless someone else comes out with a better hack for 3DS.

        Reply

        1. wololo’s avatar

          Sorry, where do you see me getting angry?

          Reply

  17. Sinn’s avatar

    They’ll get only get 1/4 of that after taxes.

    Reply

  18. GregoryRasputin’s avatar

    I said it before and ill say it again f*** True Blue, Gateway, all the reDRM junk and the criminals who make them…

    Reply

  19. badbob001’s avatar

    The article is mostly fine but for the very last sentence where it leaps to proclaiming that “you are not really paying these people for their work, you are paying for piracy.” I don’t understand what does the price markup have anything to do with supporting piracy. If they sold it for a little or no profit, then it’s less about piracy? One can argue that even if you paid no money for it, you are still potentially supporting piracy.

    There is a high markup because the market supports it. They offer a product with unique features that are in high demand and so they can charge more. As you said, the potential market size is limited and so it makes sense for them to try to capitalize on sales early instead of trying to stretch it out long term. When competitors come out with products that are more compelling, then prices will come down.

    I sometimes shake my head when I see an expensive painting that appears to be the result of the artist tripping over a paint can. Or I look up the price-controlling and monopolistic practices of the diamond industry whenever I see one of those damn commercials. Or wonder why a simple bag of animal hide is so expensive and yet so attractive to the ladies. Or why an additional measly 8GB of internal storage on a tablet costs $100 more. Then I calm down and realize that all I can really do is not buy those products and hope others will do the same.

    And don’t forget about other expenses to owning a business such as office space, employee benefits, TAXES, number of employees, master templates/molds, etc.

    Reply

    1. wololo’s avatar

      These people do not have office space or employee benefits. They most likely do not pay taxes, and it is highly probable the total number of people working for Gateway 3DS is 5 at most. The molds, etc… costs are fully included in my analysis, as part of the $200’000 fixed costs.

      I am baffled that some people think there is some sort of legit business/company running this thing o.O

      (also, since you also posted on GBATemp: I don’t understand how being personally against piracy reveals any sort of “agenda” on my end, I prefer to call that “ethics” if you don’t mind. That being said, I believe I have managed to keep my personal opinion on the matter quite separate from the article, except, indeed, for a few notes like the one at the end. What I am trying to say is that the “added value” of the Gateway 3DS does not come from the actual added value from the people who worked on the device, but from the games on the 3DS. When you pay a high margin to Apple, you pay for the security, the high customer service, etc… all of these things come directly from the work that Apple put into their products. This is very different from the case here. Am I making sense?)

      Reply

      1. Ztupid’s avatar

        You have to consider this:

        Gateways don’t want any competition, they don’t have any types of contacts, and if your 3DS get bricked because of their codes, it mean they don’t want competition. That how the markets strives.

        Look at CodeBreaker, GameGenie and severals other back in the haydays. They didn’t try to sabotage other companies, but seek to improve their own product. Chances are, Gateways probably only intended to profit with little effort in improving the software but changing a few codes once every other update.

        And remember, if they take all the efforts to hid their footprints, it meants they intend to make their escapes once someone catches a hint of their location.

        Reply

  20. icyheart’s avatar

    It is High risky investment ,But high return in other hand.
    3DSgatway team sell retailer for $55 per units without shipping.

    Reply

    1. Ztupid’s avatar

      think about it. it only cost less than that to manufacture it. even less since they’re making profits. chances are, they probably even stole someone codes and intended to make a profits off it.

      you WANT market competitions, even if it piracy, but to input a codes that you know your competitors are cloning with the intend to brick your handheld? You might as well as go buy the dang game.

      Reply

  21. asdf’s avatar

    This research is researched, but poorly and just scrambles to add a few numbers together and at the end when you couldn’t find the numbers, you used a let’s assume it’s large approach. It is poor form because you made far too many assumptions and don’t understand the business. There are numerous administrative and variable costs out and lumped up so much into the manufacturing that it is meaningless. Regardless of what you think about the business, whether it is legitimate or not, it still functions like one.

    At the end of the day, is it surprising to make a profit or even overcharge? No. They are looking to make a profit, and it is a common tactic to overcharge on the first set of units. It’s called price skimming. What I don’t understand is that you don’t see the value added and label it as piracy. Sure, it is being used as such, but much of the research is eventually going to be used elsewhere, we saw this with the region free patch already (though it didn’t work out).

    Reply

    1. wololo’s avatar

      I am open to people proving me wrong with a more in-depth research. Until then, my numbers are the closest to reality you will publicly find. Whenever I use a “let’s assume”, my numbers are still pretty accurate and based on facts I cannot necessarily share (kickstarter projects for electronic gadgets sharing their cost breakdown, historical/statistical data about companies such as Datel, statistical data about similar piracy rings, etc…), but whenever in doubt I underestimated the values (in general by a factor of up to 10) to mitigate the “bias” I might have in over-evaluating the numbers. As far as I can tell, nobody else has ever tried to publicly analyze this market so precisely.

      In other words, let’s be scientific about this: prove me wrong with a better study, or shut up

      Reply

  22. Ken Arromdee’s avatar

    I am trying to not pass any moral judgement here, but the people buying these chips need to realize a huge profit goes in the pockets of those who sell it to them, and that profit margin is completely unrealistic compared to the work and actual investment in the product. This is because you are not really paying these people for their work, you are paying for piracy.

    Would you then encourage people who find and create exploits to release the exploits for free, thus preventing companies like Gateway from making huge profits?

    Reply

    1. wololo’s avatar

      Yes, but that is a very personal opinion. I realize a free solution would make piracy even easier.

      Reply

  23. EmoryM’s avatar

    If they wanted to secure those profits they probably shouldn’t have associated themselves with bricking 3DSes – I didn’t buy a Gateway yet (updated firmware) and they’ve guaranteed I never will.

    Reply

  24. Nooback’s avatar

    You’re just jelly you dont have any skillz wololo like the Gateway team,go back to your vhbl stuff lol

    Reply

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