Nvidia’s Project Shield to not be sold at a loss, aka not cheap

January 8, 2013
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Although technically CES 2013 should only get underway today, many of the big players involved in tech chose to throw their new guns into battle early. No shockers there, but very few would have predicted Nvidia to be the shiniest star of the trade show’s debut.

Still, you can’t deny Project Shield is the biggest and most surprising bomb dropped on the Vegas stage so far for reasons we’ve already detailed. It’s obvious the handheld innovates more than anything we’ve seen in the Android universe in a long time, but even with an awesome spec sheet and an excellent functionality-portability combo, it’s a little too early to call this one a commercial hit.

And that’s due to the two biggest mysteries surrounding Shield – the ETA and pricing. Nvidia has only pinpointed the release timeframe for Q2 2013, which means the console’s most dangerous opponent OUYA will get an important head start and have enough time to impress gamers.

Meanwhile, Nvidia was completely hush-hush on the gizmo’s expected price tag during the Vegas press conference, which is never a good sign. And if you needed additional proof, here’s what the company’s bosses had to say earlier today in a post on Nvidia’s blog:

“It (e.d.: Project Shield) expresses our philosophy that gaming should be based on open platforms, where games can be enjoyed in a range of models – from free-to-play up to premium, blockbuster titles. The business model that stems from this means we’ll make our money by selling the device to gamers. (…) This differs from the razors-and-razor blades approach, which isn’t just used by Gillette and Schick. Printer companies use it, as well, making money from highly profitable ink. So do game-console companies, who primarily make their profit from premium games. This time-honored approach isn’t the one we’re taking with Project Shield.”

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So, besides the history lesson (Econ 101, but still), what can we make of this statement? Easy – Nvidia’s Project Shield (or whatever it’ll be called) will not be sold at a loss. The Android console should be considerably more expensive than Nintendo’s 3DS or the PlayStation Vita, two devices that profit from the “time-honored” business model started by Gillette.

These are sold by their manufacturers at an initial loss (or at least not for a big profit), only to then generate bundles of dough out of “premium games”.

Sounds honorable and all for Nvidia to take this apparent high road and be completely frank about that, but will regular Joes with a passion for gaming understand what the Santa Clara-based company is trying to do? And most importantly, what exactly will “make our money by selling the device to gamers” mean? Selling the Shield for $300? $400? $500? We don’t know yet, but we promise to let you know once we hear something official on the matter. Keep in touch.

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