Well while I partially agree and others have pointed out. Say Nintendo is making 100$ on each unit, they cut the price by 50$ they now need to sell twice as many units to make the same amount of profit. However people are forgetting software, if Nintendo sells more hardware inturn they will sell more software.

If Nintendo sells twice as many games as they were before the price cut they will make up the margins pretty fast. Also new gamers are more likely to buy multiple games. So if Nintendo cuts the hardware price they could sell more software to make up the hardware loss.

Assuming Nintendo has a couple killer apps slated for later this year it shouldn't be too difficult to sell more software by cutting hardware price. Keep in mind software sales are very important almost as important as hardware. Also Nintendo will want more software sales to encourage third party development.

Yeah, I agree with that, although I doubt there are still many third parties planning games for the Wii. I think most are doing their last games right now.

You go on about complexity in factors, but you name just one in that scenario.

What exactly is it you want to know? If you want more light shed on my take on the recent Wii sales and why it needs to go down in price (among other things), look in this; http://gamrconnect.vgchartz.com/thread.php?id=124694&page=7 thread.

Edit; I realize that you didn't ask me to provide any elaboration upon the factors but were stating that I failed to do it, implying perhaps that I am unable to. Furthermore, it appears as if you also imply that my including only one factor in the scenario (which I didn't either by the way, price, marketing and software are three factors) my point is therefore invalid by default. If you want a long winded post with elaboration in addition to what I wrote in the thread I linked, just say the word.

No, if I state you didn't do something I only mean you didn't do it. If I think you can't, I would have directly stated so as well. When I do the former, I imply that you should do that thing you didn't do.

I think this is gonna be a year of price cut wars so eh august/september price cut i say. 

I personally think it's possible that Nintendo will just make huge bundles for a while. Imagine, for $200, you could get a platforming console with NSMBWii and DKCR, a fitness console with Wii Fit Plus and Wii Relax, a sports console with Wii Sports and Wii Sports Resort, or a minigame console with Wii Sports, Wii Play, and Wii Party. Depending on the target audience, they could adjust bundles accordingly.

Or shortly after E3. Either or.

That could happen since there is already the sports bundle, added bonus this year would be to pack in another controller. So, all of them would have two wiimoteplus/nunchucks except for the fitness one that one could have the wiimoteplus/vitality sensor/balance board for 250.

EDIT: Plus signs are still broken :|

It's not that simple. They'd be halving their initial profit, yes, but not their long-run profit.

If the people had bought just the Wii, and no games and no controllers, they would have halved their profits. But seeing as people buy games and remotes - which most likely account for more of the profits than the hardware - it's nowhere near as simple as you portray it.

Perhaps even more than halving... their profit margins dropped considerably when they cut the price the first time which also coincided with currency woes. Effectively they would be substantially reducing their margins per console in order to attract the worst customers they have yet, those who were too stingy to pay $200 for a Wii so why would these same people turn around and buy full price software? The most price concious people are the people who are most likely to buy used or rent their titles. Theres a reason why most companies aren't in a hurry to cut the price below $200 and why they instead tend to elect to keep the increased margins from component cost reductions.