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I think the Wii was overpriced when it came out, but it sold and kept selling, so Nintendo didn't see any reason to lower the price.  Maybe they're finally at the point where they need to lower the price.  The question is, how low will they go?  In the US, the Xbox 360 Arcade goes for $200, so if the Wii goes down to $200, will it be enough?  And what if the Xbox 360 gets another price drop?