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I think some people are forgetting that retailers make very little money from hardware sales and relatively more from software.

I think Nintendo needs to ensure, at least initially, that it doesn't piss of the major retail chains by undercutting them on price. This could result in compromised software profit for retailers who may then feel less kindly disposed towards Nintendo in terms of shelf space afforded the Wii U.

When the PSP Go launched in Australia, one of Australia's largest retailers refused to stock it because they saw no value in selling the hardware if they couldn't subsequently make profit from software sales.