I think the Wii may be a bit more expensive to build than you're giving credit: while the processing hardware is pretty vanilla, the other kit in the Wii (blutooth and wifi chips, the fancy slot drive, the IR and motion sensors, the solid-state memory) are likely still relatively pricey although continually declining. For Nintendo to have room for a healthy profit I doubt they could go much lower than $200 right now. As I recall that was their target price initially, and essentially what it goes for in Japan minus the pack-in, but in one of many recent bouts of genius Nintendo decided to bump the price a bit (which obviously hasn't hurt sales at all) and give most of the difference to RETAILERS: so that EB or WalMart or whoever make (as I recall) over twice as much selling a Wii vs. a PS3, hence the Wii is getting better placement in stores (an area where they really suffered with the GameCube getting pushed into the dark corner)
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