The 360 started selling well when his price dropped

Exactly.  At $349 it will absolutely sell to early adopters and die-hard Nintendo fans... as long as it has great games available.

I do agree that it could still be lower, however.  I still stand by anywhere from $299 to $349; I seriously doubt it'll be a penny out of that range.

I would expect the Wii U to do substantially better at $350 bundled with a game than the XBox 360 did at $400 for multiple reasons:

1) The Wii U will have a larger established userbase (over 100 million) than the XBox 360 had (25 million)
2) The Wii U would be $50 cheaper
3) The Wii U would offer a "free" game
4) Inflation
5) The Wii U will be launched 6 years after the Wii, while the XBox 360 was launched 4 years after the XBox

The big challenge for Nintendo (and any company) is that the higher the price of your system is the more you have to do to justify the price with quality games. With a $200 console Nintendo would probably sell a ton of systems on potential alone, but if they hit (or pass) the $399 mark they will need to have several games released and several games on the horizon that really interest gamers in order for them to justify the price.

At $300 or $350 a strong launch line-up and a few games released in the first year will go a long way to getting people to adopt

I don't think the Nintendo players want to buy a high priced hardware. Nintendo console are the home of their game and that's why they are selling well. People will be very disappointed if this is released at more than 300$ and for sure I would wait a price drop before getting one. With the pricedrop effect of the 3DS, Nintendo would shot themselve in the foot by pricing the Wii U high, as the Wii U has a less solid position than the 3DS had.

They should not think about their profit for their first year I think, as the important is taking the biggest advantage possible before their competitors are ready.

One of the grave mistakes done in calculating the relative price of the consoles in a time-series is to use the so called inflation adjusted price/cost approach, by ignoring the relative trend in specific industries...

Now guys listen... The cumulative CPI from 1985 to 2011 in USA is around 227, which means the relative Consumer Price basket has increased from $100 in 1985 to $226... By that logic, the NES. which was nominally priced at $199 back then, would equal to $199*2.227 = $452 .... However, this doesn't add up! People would never pay that kind of money then, just like they would never pay it today, especially to a toy!

When you make such calculations, you CANNOT use the GENERAL price level to convert the nominal data to the REAL values. In fact you have to use the industry specific data! In this particular case, the industry is the computer industry and prices have generally been declining... In other words, the inflation specific to computer industry is negative! So given the equal conditions, it's totally normal to expect "lower" or "equal" prices from the consoles...

This is particularly true since people's perceptions are not absolute but relative to other items... When all other technological products are decreasing in price, you cannot expect people to attribute a higher value to consoles. So the relative value of $199 in 1985 is probably not higher today but lower as a matter of fact (since technology is so much cheaper).

If there is a price increase in consoles, it's mostly because of two factors:

a) The increase in the expectations and abilities of the consoles : NES could only play games... PS3, on the hand does a lot more other stuff, which also contribute to its cost, value and price

b) The general increase level in CPI also implies a relative increase level in "wages": People therefore have relatively a higher purchasing power of technology, which in turn increases the demand for it, along with an increase in price and consumption.

In Conclusion, The technological progress pressures the prices down while the increase in the abilities of consoles and people's purchasing power of technology push it upwards, ending up with a relatively stable pricing path.

About the pricing of WiiU, here is my educated guess...

One plausible approach is "the cost approach" since firms usually do not aim to make profit from selling the main console, so there is an absolute correlation with its price and cost.

In terms of manufacturing, WiiU will definitely cost MORE than Wii, due to the incorporated touch screen gamepad... It will also cost more than an Xbox 360, since Xbox360 didn't have any new technology in it except for its relatively cheap CPU... The basic model didn't even have a Hard drive, and it used mostly off the shelve components... WiiU, I believe will cost slightly more than an Xbox360 to produce due to the touchscreen gamepad, which cannot cost less than $50-$100 (which is way more than a regular gamepad). However, it will still cost less than a PS3....

Now, the costs might come down by time, but if nintendo doesn't want to loose money with each WiiU sold, they have to price it between the introductory price of X360 and PS3... But of course, we know $299 and $399 are rather important pricepoints, and even Wii was priced at $249 at launch. Nintendo has no plans to discontinue the original Wii, and they announced that WiiU is addressed to a different audience for a reason! And a mere $50 difference is not enough to justify such an announcement.... Given all that, it shouldn't price any less than $299, and they would loose too many sales after $399, so it can't be more than this either, which is also true to their history.

In Short my best bet is between $299 and $399 for WiiU... I'd tend to think that it will start off with $399 and drop to $299 after a period, while this period depends on how Wii and WiiU perform and their opponents (namely MS, and Sony) do/react.

I think you're under the impression that there is uniformity in what Nintendo fans (or any gamers) will pay for a system ...

Like most statistics in the real world, I expect that what people are willing to pay for the Wii U follows a normal distribution. If I were to guestimate the mean and standard deviation, I would say that the mean would be between $300 and $350 with a standard deviation between $50 and $100. While it would be best for potential sales to price the system at one standard deviation below the mean of what people are willing to pay, a system in its launch year with a large existing userbase could be priced as high as one standard deviation above the mean of what people are willing to pay and still sell as many units as you can produce in the first year.

So two people from NInty say it wont be cheap, but some people still think it wont be more than 300?? Who to believe, the people who are actually making the damn thing or those who are just fans?? hmmm

When you factor in that the games will (likely) cost $10 more than Wii games, the tablet controller may cost $10 to $40 more than a Wiimote & Nunchuck combo, a moderate price increase to the console ($50 to $100) would be in line with the claim that the Wii U was targeting customers with more disposable income; especially if you consider that claim as being relative to people who are currently buying a Wii.

yeah, i really doubt they are talking about people who are just now buying WIi. Im pretty sure, they are referring to when the WIi launched. If the damn Wii U was going to cost just 250 (current Wii is 150 with games) why would they say it was expensive, why would they say its for people with more disposable income. It makes no sense. 350-400 i say