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Nintendo ordered to pay portion of every 3DS sold to another company

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(Credit: Nintendo)

The 3DS, currently Nintendo’s best-selling piece of hardware, is about to be a bit less profitable.

U.S. District Judge Jed Rakoff has ordered the company to pay 1.82 percent of the wholesale price of each 3DS it sells moving forward to a company called Tomita, after Nintendo was found to be using patented camera technology without permission.

That could mean substantial payouts. The system retails for $170 (or $200 for the XL variant), though the wholesale price of the 3DS is a trade secret at Nintendo. The company has said in the recent past that the system still sells at a loss at retail.

The case dates back to 2011. Somewhat ironically, it’s tied to a feature that isn’t as widely used as the company had hoped. The suit alleged the 3DS’s twin cameras, which let users take 3D photos and videos, incorporates uncredited Tomita technology.

While the penalty hurts, it could have been worse. Judge Rakoff contemplated ordering Nintendo to pay a flat rate for each unit sold, but opted against that since prices were likely to fall over time, resulting in an “unearned windfall” for Tomita.

The per-unit fee comes on top of a substantial cash ruling against Nintendo announced back in August. A jury originally awarded Tomita $30.2 million, but Judge Rakoff deemed that excessive, noting that while game sales have been strong, the hardware itself is still not profitable and that most games didn’t use the technology at the center of the battle. He later cut the damages in half to $15.1 million.

The 3DS has been something of a savior for Nintendo. At the end of October, the company reported sales of 3.89 million hardware units during the first six months of its fiscal year. Life-to-date sales at the time were closing in on 35 million and almost certainly surpassed that number this holiday season.

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