Was Nintendo right to opt out of the graphics arms race?

[Leynos]

Wman1996 said:

Leynos said:

In 2006 I believe it was reported Wii manufacturing costs were $160.

Which means that Nintendo would not have charged less than $199.99 since they typically make a profit on hardware, even at launch.

3DS was sold at a loss for a time following its price cut. GameCube was most likely sold for a loss when it was cut to $99.99. Wii U was apparently sold at a loss from the beginning.

Even with its weak processing power, Wii was not going to cost anything below $170-$200 at launch. 

You're forgetting distribution costs and retailers get a cut.