The costs of the materials inside Microsoft's Kinect motion controller add up to around $56, according to a report.
"Basically, the strength of the design is the huge design win for the Israeli fabless company PrimeSense," said Allan Yogasingam, a technical marketing manager at UBM TechInsights. "They've provided the most innovative portion of the Kinect with their image processor, audio and video interface."
"The future applications of this technology could be fascinating. I can see this being incorporated into televisions - allowing users to change the channel by waving their hand, essentially replacing the remote control."
PrimeSense's technology is available for other hardware manufacturers, although Microsoft has the exclusive deal for home videogame consoles.
The Kinect hardware sells for $149 in the US and £129 in the UK.