The moderately bad news is Nintendo are losing 20 billion Yen a year on hardware, the good news, DS titles will be cheaper than GBA games!

Japanese stock newspaper Kabushiki Shimbun have reported that Nintendo are losing up to 20 billion Yen on hardware. However Nintendo plan to cut costs by reusing factories for the next generation of consoles.

Game Science have also reported that Nintendo's Q1 results for the fiscal year 2004 are up, with Net Income at 22.64 billion yen, up 97.7%.

Kabushiki Shimbun also stated that the cost to produce a Nintendo DS title will be 30-70% less then a GBA title due to the change in media. While this may not mean that the software prices will see a 70% drop in prices when sold it may encourage developers to create more games.

Update

For those who are confused, or those who are pedantic, Nintendo are losing 20 billion Yen on hardware alone, still earning a lot of money through software. Microsoft and Sony lose a lot of money on hardware as well and it is software that is the main staple of sales.