With the amount of labor, R&D (seeing as this is machine #1), and then the cost of materials, I would imagine that the WOZ machine has a true cost to JJP of about $4-5k.

If we are only looking at materials cost (done on a quasi mass level), I would imagine they would add up to $1-2k. Think of the cost of printing, the figures on the playfield, the computer system within the game, etc.

In the restaurant (stretch, I know) business, the rule of thumb is to take your food costs and multiply them by 3. That covers the cost of food, labor, and overhead. The margin above that number is, in many cases, the profit.

So, with that in mind, say JJP rakes in $3k on a retail sale. That would make their cost for materials in the $1650 range, labor another $1650 (which includes design, engineering, production, management, etc.), with overhead being another $1650. So, on their $4950 investment, they are profiting $3k. Seems reasonable.