My theory: Wii is already raking in a lot more profit than the average new home console, all thanks to the high prices on the competing consoles.
It's clear that Wii makes at least $50 profit in the U.S., because Wii Sports costs next to nothing to include, yet the system costs about $40 US more than the Sports-less Japanese version.
On top of that, I suspect Wii was designed to have an even lower retail price than it does - after all, it's just two GameCubes duct-taped together, right? How does that cost $250? I think when Nintendo saw the demand for Wii at E3, and the high prices on the competing systems, it saw a chance to price Wii even higher than it had planned, and took it.
What a difference a year makes. When Nintendo announced the price, gamers everywhere cried foul. Now I have friends who think Nintendo was stupid not to make the price even higher, based on how well it's selling.
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