I usually like to keep R&D completely out of the equation when analyzing price. That $160 is the estimate for the cost of the hardware and doesn't cover the prices associated afterwords like packaging, shipping, wholesaler and retailer cut. It's been analyzed for quite some time now that the Wifi model is selling pretty close to cost and the 3G model making a profit.
By and far the profits are made from software, accessories, and memory cards. Which the later is also priced higher than standard SD because of the production levels can't match that of SD to bring the cost down, not just to create profit.
Sony probably has reduced the manufacturing price of the Vita and established more profit per sale and not wanting to lose out on that while prepping the PS4 launch. They still chose to cut the price in Japan, but Japan was also paying the brunt of the cost of the Vita. Still it is high time for the price cut and a stronger push towards sales unless they are truly holding out for PS4 to grab a foothold before making the Vita an affordable companion item and only offering steep holiday deals in the meantime.
Regardless, they aren't using Vita as a buffer to handle PS4, they are trying to make it post profit steadily by itself. Sony is a large company and can still maintain a typical launch strategy. The PS4, not looking like an overly expensive one like the PS3.
Before the PS3 everyone was nice to me :(
