Tuesday, January 8, 2013

Nvidia's Project Shield won't be cheap

Nvidia dropped what is arguable the biggest bomb of CES 2013 and we are now getting more information about the well talked about device. Nvidia has gone on the record to say that they will not sell the device at a loss and continue to say that they will "make [their] money by selling the device to gamers". For those of you not familiar with how the gaming industry works, companies like Microsoft, Nintendo and Sony sell consoles at below manufacturing costs (essentially a loss) to drive games sales and make profits from those sales.

In Nvidia's case, they have decided to buck the norm and sell the device at profit. While we understand the need for this strategy, given that Android and especially PC have strong game ecosystems, we aren't sure how well the strategy will pan out. In the case of non-smartphone Android devices, consumers have been extremely sensitive to pricing. Look no further than the failure of non-Nexus tablets and the relative success of an aggressively priced tablet like the Nexus 7.

We don't doubt in the technology behind Project Shield, but if history is any indication, we can't see the product being a big hit if it carries a hefty price tag.

Source: Nvidia Blog

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