Umm... Nintendo did cut the price despite selling on profit lol. You're missing the obvious.

Retailers usually get about $5.00 from each system, the real mark-up is on the games. I tried to start a game shop a few years back and I really don't think things have changed that much on the retail end.

Yes, it has:  http://www.vg247.com/2011/08/01/iwata-3ds-price-drop-avoids-gamecubes-mistakes/ 

Nintendo jumped the gun are their price cut. Nintendo expected remade ports of N64 games to sell the system for the first 7 months on the market. They didn't, even with the $80 price cut. It wasn't until Mario came to the rescue...oh and the holiday shopping season.

Vita does not need to have a price cut. Japan needs games targeting japanese gamers. There haven't been much at all in the way of what made the PSP a success there. Uncharted, Resistence, Motorstorm, LittleBigPlanet and Call of Duty will drive the Vita in the NA and EU markets. But Vita needs Final Fantasy and Monster Hunter for the Japanese market to erupt for PS Vita. (considering I don't think Sony will get Dragon Quest back).

If Sony is making a profit off of the PS Vita then they need to keep the price. Sony as a whole needs to be focusing on the returning to MAKING MONEY instead of losing it. Vita needs games. 3DS is falling like a rock post holidays, just like every other system on the market. Despite every system being cheaper now (minus the 360) than last year.

Games sell systems. Nintendo has always made a profit on the systems. They cut their price shortly after E3 because when everyone walked away from that event. Everyone was talking about how Sony nailed the price of the Vita. Sony had a perfect conference with the Vita last year. There was actual pressure on Nintendo to do something to guarantee they wouldn't lose a market they have dominated since they entered it.

The question leaving E3 was, "Can the 3DS hold off the Vita with them priced at the same $250 price point?". I remember looking through multiple sites that stated Vita will beat the 3DS (this was before the $80 price cut and the only game on the market worth anything was The Legend of Zelda: Ocarina of Time 3D though). Even after the price cut for the 3DS the system didn't start flying off the shelves.

Nintendo needed to do something to not lose this segment of the market. If they didn't act, Vita would have stomped on them. What I see is Nintendo can't compete when they come to Sony's or even Microsoft's turf.

So 3DS should be more expensive to produce then Vita???

I doubt it, really!

PR, if you ask me.

There is no discrete GPU. It's part of the SoC along with the CPU and a bunch of other stuff.

As you said, Nintendo realized that they had to cut the price as the current games out for it wouldn't sell hardware while at the same time there were no huge system seller coming out for the near future. To reach their predictions (which was their main goal) they also had to rush out Mario Kart 7, as they feared that Super Mario 3D Land wouldn't be enough to push sales. Where it not for the price cut AND Mario Kart 7, Nintendo likely would have sold less systems than initially predicted. The price cut was necessary!

It doesn't seem to much different with the Vita. No Japanese best sellers are gonna be released in the near future, and if the Vita doesn't want to end up like the Gamecube (slow start; no penetration to the masses) they are likely gonna have to cut the price, just like many retailers already have. This is extra important now that the 3DS has Monster Hunter on top of that price.

Did you read the OP? Component costs doesn't cover all.

A PS Vita price cut will happen, but it will not be within the first year and will not be a knee jerk reaction to the Japanese market. The games that are coming in the short term are geared towards the NA and EU markets (FPS's, TPS's and Racing games). This is the problem with the Japanese market. They have lost how to make stellar games in a short amount of time.

Uncharted: Golden Abyss was made in a little bit under a year. Developement started in 2011 and finished in 2011. It's the best reviewed game for the Vita so far (I haven't checked in about a week or two though, might have changed). Sony is making a strong profit in Japan. Things will turn around once the games come.

Nintendo had a knee jerk reaction and (as you said) rushed games.

3 YEARS!! =O