Nintendo shouldn't cut the price at all. I don't think a price drop is going to ignite this system like it did for the 3DS. Nintendo should hold off, wait until they are selling it at a profit, and never sell it at a loss again.
Gamecube, N64, and SNES all sold modestly, but they all made profit because they were never sold at a loss. This is the route Nintendo has to take with home consoles. The model that Sony and Microsoft use for their consoles just won't work on Ninty consoles.