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Sony's policy is to sell their products at extremely slim margins. So I could definitely see a price drop to $199.

One more thing: I'm quite sure when Sony says "we are making a loss on it" they are making a loss. Has that changed? Anyone seen anything regarding this in Sony's financial reports? I'm being serious here. I don't trust these reports. I remember the 3DS BOM was estimated at $110 yet they are making a loss at $169. I want to know what SONY has to say on the subject. They are the ones who know if the Vita makes a profit everything considered.