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I can't help but think that the Wii was (initially) priced with the expectation of a price reduction in the (somewhat) near future ... The insane success of the Wii has made it difficult to reduce the price of the Wii because it is in a position where a price reduction offers no benefit.

My personal expectation for the Wii is to have Nintendo bundle an additional Wiimote & Nunchuck and Wii Sports: Resort with the existing Wii bundle at the same price in 2009, and for them to then reduce the price (for the long run) in 2010 to $200. I could be wrong, but I suspect that a console with two games and two controllers for $200 is the type of product which has already hit the "peak" value to cost ratio for most consumers.