i bet they planned this. Give little confidence. watch shares fall. offer to buyback shares at the new cheaper rate.

They release a HUGE blowout of info. Watch shares rise due to new confidence and sell for a tiny profit.

I think it is possible for Nintendo to set an MSRP below $300 while still remaining about even or slightly profitable (negligible either way).

After some second thoughts about the controller in particular, I think they will be able to produce them for much less than I had originally assumed on the basis that it is not a separate, independent game playing device, but essentially a satellite that pipes a video signal and player input from the base unit itself (the console box). So, no CPU, no GPU, no significant amount of RAM, maybe some NAND flash memory to hold player settings and profiles, individual user game data, characters, etc and a signal processor for transmitting the A/V signal and player input data.

The 6" panels themselves may well be $20 parts (not including the touch interface), possible even less. It appears they use resistive touchscreens as they are compatible with the same plastic stylus used by the DS line which are less expensive than the capacitive touchscreens used in smart phones, iPads, and the PSV.

The internals (to include the motion sensing components) are likely similar to those currently used in the Wii Remote Plus, which probably cost less than $10 based upon the sub $10 BOM of the original Wii Remote back in 2006 while still factoring in for the additional gyro and circuitry of the "Motion Plus" component.

While Nintendo may charge up to $100 per controller ($80 seems a bit more consumer friendly; the original cost of the Wii Remote, Nunchuk and Motion Plus) it may actually be inexpensive enough to produce that they will still make healthy margins on every unit sold.

The console itself appears to based around an updated version of the IBM CPU used in the Xbox 360 (faster clock speed and possibly an extra core) which is currently a very inexpensive chip and the GPU is allegedly based upon ATI's R700 family, possibly the RV770 (used in the HD4870 from 2008) leaving the 1GB VRAM and 512MB of XDR RAM as other key components in the BOM.

The optical drive is presumably a proprietary format (no BD or DVD license fees) using a high density format (to hold BD comparable data storage) which would make it the other core component to make up a sizable percentage of the overal production cost.

Currently, internal BD drives can be found at retail for under $100 ($79). Retail, not OEM volume price while still including format licensing fees. The proprietary drive could potentially be a $30 part (OEM part, volume), very possibly even less, leaving the PSU/AC adapter (not internal due to dimensions of the console) one of the remaining core components likely to cost over $10 along with the casing (small console, casing should be no more expensive to produce than an external optical drive of similar size).

There was no mention of internal HDD in keeping with previous rumors Project Cafe had no internal bay, and given the dimensions of Wii U (similar to the Wii), this seems all but confirmed. HDD is still one of the more expensive components in both the PS3 and the Xbox 360.

Admittedly, there is a HUGE amount of guesswork here, but it's not unreasonable to see how the productions costs on the Wii U could be significantly lower that what some are assuming it will be.

I'm pretty sure Nintendo could sell the Wii U at $299 while retaining profitability on each unit. At $249, based on the very limited breakdown I've done in my head, I could see them breaking even at best.

One thing I am certain of is that Nintendo will not break form by selling their new hardware at a loss. By waiting several years to introduce 7th gen ("7.5" more accurately as they will all be improved/customized versions of older technology) core components into their hardware necessary for 1920x1080 native render output, the price on these matured components should not carry any sort of premium allowing Nintendo to sell units profitably at the same consumer friendly prices expected of them.

I think Nintendo is probably aiming for $300, but is aware that echange rate change may push the cost of the system to $350 or $400 ...

It Nintendo can sell it for under $350 with an interesting bundled game I don't think price would be a major issue for the system.

I've actually been thinking something very similar in regards to the cost of the controller ...

I constantly seen no-name lcd touch screen color ebook readers for less than $100 (usually with a 7 inch display and a resolution of 800x480) and these often included the more expensive capacitive touchscreens along with components we wound`t expect the tablet controller to have (CPU, memory, sd-card readers, etc.). While I wouldn`t expect Nintendo to sell it for $40, I wouldn`t be surprised if Nintendo could bring this controller to market and sell it at retail for $40 while still turning a profit; and I would expect the price of it to be (close to) $60 to $75

The only issue at $250 would be Nintendo protecting its famous margins on hardware. That's only if I'm grossly overestimating the potential production cost per unit. 

It's a given they won't sell at a loss; that's just not how they do business. It seems just as unlikely that they'd be willing to sell at more or less even costs.

While Nintendo hasn't released specifics on the console as they never really do, based upon available information, it does appear that most, if not all key components are mature, meaning modified/customized versions of good hardware from at least 2-3 years ago (the CPU and GPU in particular). That would make a $299 price doable without taking losses and potentially even making a small profit on each. Nothing like the 3DS of course, but I do believe it's not a huge engineering feat to design a console capable of 1920x1080 native render at reasonable frame rates (30-60fps) for just under $300. 

I'll just say that if the Wii U is priced at $299 with additional controllers priced at $80, I'll be entirely unsurprised. 

I would gues $299 also.

The controller alone could cost over $100. Bye-bye offline multiplayer.

I say $350, though I must say I am definitely not impressed with the new console or the controller, mainly because of the PS Vita

It is said that it will work with all the current Wii equipment, so you can do offline using a Wiimote and the classic controller plug in.  The latest word is that they will NOT be selling additional screen controllers.

Right now, the official plan is that the controller and the system are 1:1 packaged together and neither will be sold alone.

However, they are still looking into the possibility of expanding to a two controller setup.

Anyways, it won't sell for anything above $300, and I entirely expect them to try getting it as close to $250. People need to remember, though, that $250-$300 is less than it was even five years ago, and incredibly less than 10-20 years ago. At $300, it's still considered very competitively priced in comparison to the NES, SNES, N64, and GCN's launch prices of $200.