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I like some of the points you made, the only thing i strongly disagree on is:

"If say, the 360 or PS3 drops the price, [Nintendo] should drop their price."

I really don't think it necessary for the Wii to drop in price, because it already has an affordable cost attached to it, even if PS3 and 360 drop theirs

 Edit: Desroko beat me to it :(