When will Wii see a price cut?

[NJ5]

This is actually a very complicated question in the case of the Wii, because it's still selling out. The question of "when to cut the price" is inextricably linked to the question of "when and by how much to increase production". Therefore, there's a two dimensional decision to be made here.

I suspect that the criteria for making it depend on factors we don't know. From the top of my mind, two of the factors are:

1- What's Nintendo's aim right now? Is it to maximize profit? Or is it to try to inflict as much damage as possible to their competitors, with the "profit" goal to become more important only later in the generation?

2- What is the current cost of production?

Until we have at least approximate answers to one or both of these questions, I believe we can't predict price cuts. At least I can't! But I can hypothesize based on those 2 questions:

1- If Nintendo's goal is just to maximize profit, I believe they should just increase production for now, and only cut prices when demand starts to decline significantly. If they are more intent on crushing their competition, then perhaps they should do both things this year.

2- If the current cost of production is much smaller than the average amount they get from customers (it varies by territory), then they can increase production by quite a bit, while maintaining the option of doing a significant price cut if demand slows down. This would be a good situation to be in, since it would imply that they can keep making big profits while stepping on the competition's toes as much as possible.