It was a big drop, but Nintendo needed it. NDS launched at 149$. 3DS launched at 249$. It`s a big difference when trying to replicate the success of DS.
Of course, that by doing that, Nintendo will be in the red for a period of time.
This last part will be overcome in two ways: by mass production of the parts and/or a redesign (3DS lite) with a higher price tag of, let`s say, 199$.
And a future redesign with a higher price may now be doable without cutting price once again seeing as there is room for the introduction of the redesign within a acceptable price tag.

I think that if this happens, not only can Nintendo have a margin for future price drops but also make profit on the hardware as a whole.

What may end up happening is that the 3DS will simply end up cannibalizing sales of DSi due to the closer price points.

It will be interesting to see how the August total sales add up at any rate. Naturally, the 2011 holiday season could be the make or break determiner for the future of the 3DS.

With the massive and early price cut, Nintendo won't be cutting the price again until the hardware sees a major cost cutting revision (difficult as the 3DS is already a low cost BOM device) or risk sending the signal that the 3DS is a dead platform on the way out.

To some, the new price point will seem like a bargain, but to many others, until the library improves, lower cost is not enough to pick up a new gaming platform.

Nintendo doesn't want to be known as the company that drops prices every now and then.
The drastic drop is a solid move. It is also a move that reflects closer to that of Nintendo's market. Nintendo has always been the affordable console that every family can buy. The price has always been the number 1 factor for Nintendo.

I just hope that the price cut has the intended effect.

Would you rather pay $250 or $170? That really the only matter. Just don't see anyone not wanting to buy one because it cost too little. Plus there has never been a quality issue with Nintendo.

I think the price cut is way too drastic. It hurts the early adopter , now you say that the 20 games make up for the 80$ lost by the early consumer. Yah possibly however I for one never planned on buying any of the games offered in the Ambassodor pack. I am very tight for cash unemployed and put the 3DS on my credit card. That 80$ could have really helped me out. So yeah I'm pretty livid that Nintendo cut the price by 80$. Now will I hold off on early adopting WiiU, no I don't think Nintendo will make the same mistake twice, they will launch WiiU at a reasonable price and I will have no problem buying it.

However I can see the price cut as part of a massive attack on Vita. The price cut and if Nintendo cuts the DS line permanently the Vita won't have a chance in hell. With all the games coming this fall/winter and a 80$ cheaper price tag with proper marketing Nintendo could deliver a crushing blow to Sony. Again Nintendo will need to play its cards right but they could definatly deliver a blow to Vita right out of the gate.

Also Nintendo needs to boost hardware numbers to satisfy investors. Investors don't seem to care that DS and Wii are bringing in tons of cash, both are seen as temporary. Nintendo needs to show investors that they have long term profitability. If the 3DS can be sold at 169.99$ and shifts nearly as many units or more units then DS it will help relieve investors, in turn buying them time to prepare WiiU's launch.

In the end I think the price cut was a good decision. I hate it but it was smart on Nintendo's behalf. I think Nintendo could have succeeded at the 250$ price point, they would have turned a healthy profit on each unit and while it would have been out sold by Vita or at least a tight race I think Nintendo could have pulled it off. However investors don't share that sentiment so the price cut should definatly help relieve concerned investors!

Man! Only Nintendo can get hate from a price cut.

They're always one step beyond!!!

The iPhone price dropped considerably a couple of months after release..... obviously it failed to sell well as a result =/

There's more truth to that statement in this particular instance. 

The contingency plan to drop the MSRP of the 3DS was undoubtedly made shortly after SCE announced the pricing for the PSV. The two devices don't compare favorably at the same price and Nintendo simply won't have enough solid software titles by the time the PSV debuts to level the perceived differences between the value of each for any consumer on the fence between one or the other.

That plan was implemented when it became apparent Nintendo was nowhere near close to hitting its initial sales projections for the device. 

The reality is the only people who have a legitimate reason to be upset about the price cut are the early adopters, as no one expects to see a new gaming platform experience a 32% drop in price after only 4 months. Anyone else who was interested in buying one, but balked at the price should be pleased with Nintendo.