I think a 199 Wii would better in terms of the psychological aspect of marketing . A $250-$199 price drop almost looks like the Wii has had a $100 reduction in RRP.
I do have some doubts about whether or not the person who could afford a $199 Wii wouldn't be able to buy a $250 if they wanted to. Yes it cause a noticable boost in sales for the Wii but I don't think it'll be very signifcant nor will it do anything meaningful in the long term.
Nintendo is better off holding on to the profit for now , they'll use it to extend the life of the Wii rather than using it to attack their competitions market share.










