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Nvidia hints that Project Shield will cost a bundle of money

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Nvidia Shield stock
Nvidia Shield stock

Nvidia already told us that we shouldn't expect the 5-inch Project Shield handheld gaming system to be a loss-leader, but tonight the company's really driving that message home. On the official Nvidia blog, SVP Tony Tamasi explicitly says "we’ll make our money by selling the device to gamers." He continues on:

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.

Why highlight this again? Probably because Nvidia's preparing us for major sticker shock when we see the Shield's price tag. When Nvidia helped Asus and Google build the Nexus 7, the companies leveraged economies of scale (and possibly sold components at a loss) to bring down the price of the premium tablet to a practically unbeatable $199. Now, however, Nvidia may have to distance itself from the idea that Tegra tablets should be cheap in order to make a profit from the venture.

Or maybe Nvidia's merely hoping to convince us that the Shield's price will be high, so it can pleasantly surprise us once again when it reveals a lower than expected number.