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nomad said:

Still, I think it shouldn't be that difficult to find a manufacture to produce low res screens. I don't see how 480p is anything special, atleast right now and the near future. Larger low dpi/ppi panels are still being mass produce and will likely continue to be produced at large quantities for laptop, TV, etc. Those will be good source for Nintendo to get their panels. Even ones used for 1080p tablets can be a good source, just cut them smaller.

Alright, let's analyze this a bit. 

Let's say Nintendo makes a hanheld with a 5 inch screen at 800 x 480. That's a PPI of 186.59. Televisions have PPI's anywhere between 50-70, so that would be way too low (less than 3DS) and computer monitors have PPI between 80-120 (about the same as 3ds.) 

Phones have PPI's above 250 these days, and tablets have PPI's 200-250. 

There is no device, other than Nintendo's current devices that really use a PPI between 150-200 today. Smartphones did when the 3DS released, and the Wii U's gamepad isn't very cost effective even with its WVGA screen. Even the cheapest of Chinese Android phones ($70-80) have 200 ppi screens. 

If we are going to assume that such device will have a touch screen as well, and they want to keep the ppi of both screens similar, that would mean they'd have to go with a resistive screen (nintendo doesn't want finger touch.) That would also limit them. 

Also screen resizing has additional manufacturing costs involved. And Nintendo needs to predict cost/time. Will the costs increase or decrease in price over time?