Nintendo can financially drop its price because as said they are still gaining money.
But, if Nintendo lowers the price below the 200$ mark -right now- the sells will probably drop. Most buyers are "casual" and in that case, a console at a low price = crap. Their psychological price is just right as it is. 250$. Maybe 200$ or a bundle for any calendar events. The sub 200$ mark will be hit in let's say 2 years.
End of 2008 (31 dec.) prediction :
Wii : 53.5 Million
PS3 : 24 Million
X360 : 27 Million
Prediction started January 1st 2008.