Most analysts don't have a clue. These are the same "analysts" who claim that traditional video gaming is on the way out, yet look at this Christmas's sales. I don't see any decline, do you? I'm probably being a little unfair though, they are a broad range of people with a broad range of marketing and sales ideologies, for every analyst who says dedicated handheld gaming is dead there'll be another who says the PS Vita will be a smash hit a $250 (although it would appear the latter would be wrong, but you get the picture).
The key thing is Nintendo may as well have taken $250 off consumers at launch anyway. With no good games in the early months they were unlikely to sell in great numbers anyway, so you may as well take 250 big ones off the guys who do buy the unit. It's immaterial at this stage. They're selling buckets of the things now and, most importantly, I guarantee they're selling them at a, albeit insignificant, profit. Most reports from the price cut time suggested Nintendo were likely to make somewhere between a $5 and $10 loss on every unit sold at the lower price. That, however, was nigh on six months ago, and as anyone who watches the price of hardware will know, hardware drops in cost by a reasonable amount over a period like that.
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