The more I think about it, the more it makes sense. A $199 price tag would see them explode onto the market, and possibly equal the iPads marketshare within a few years. Games consoles should also follow this business model: cheap hardware, and then make shitloads of money from the software due to the giant userbase.
My prediction threads:
Wii U will sell under 40m units (made on 14th September 2012)
PS Vita will sell under 20m units (made on 30th September 2012)
Wii U will sell under 7m in 2013 - I was right