Good point. The thing that bothers me is Nintendo could have afforded to drop the price in order to maintain success. Maybe they saw how slowly they were able to make games and how quickly 3rd party support dropped off and concluded that being successful this gen would have put pressure on them to produce software they weren't prepared to live up to.

I own a Wii U and I am just trying to make sense of their strategy.

Microsoft's apparent cuts are nowhere near as drastic as 3DS's price cuts. 3DS's cuts were 25% to 33% globally, Microsoft so far in the UK and apparently US has cut the price by less than 10% and 10%. Microsoft have not responded anywhere as aggressively as Nintendo did when 3DS underperformed.

As for the context of Wii U/Xbox One, let's think about that. Microsoft have bigger pockets than Nintendo, but they can also ill afford Xbox One to seriously under-perform. As a corporation, Microsoft are moving away from serving the consumer entertainment sector and back towards serving the business sector. Xbox One doesn't fit with Microsoft's wider direction, so any weakness in that division could see Xbox jettisoned. Microsoft need Xbox One to remain competitive if they are to continue to invest in the videogame market and Xbox brand.

Despite the comparatively weaker financial position that prevented Nintendo from cutting Wii U's price aggressively and rapidly, Nintendo are paradoxically more able to survive the failure of one home console than Microsoft are. Failure for Xbox One represents a failure of Microsoft's vision for home entertainment. Failure for Nintendo represents the failure of one device to chime with the market. In this regard, Nintendo's mentality is more like that of the toy company they used to be before entering the videogame market. If a product fails, launch a different product. If Xbox One fails, Microsoft's wider vision for that division and that market has failed.

Wii U is obviously an embarrassing and serious failure for Nintendo, but it doesn't completely undermine the momentum and structures that have served Nintendo for thirty years. Wii U still leaves Nintendo as a company making hardware on which they sell software, whereas a seriously under-performing Xbox One is one venture amongst many Microsoft invests in, which would draw serious questions around continued investment in that one venture. While it would be tempting to argue that Nintendo should go smartphone or software only, both paths are fraught with serious risks (smartphone development is seriously crowded and Nintendo will have watched Sega's post-hardware decline very closely) and the rewards aren't as great as Nintendo nailing their own hardware-led, exclusive software approach. In short, Wii U is a failure, but not one that sinks Nintendo's prospects as a videogames manufacturer, the only field on which Nintendo currently competes. Xbox One's failure would undermine Microsoft's position as a hardware manufacturer because of the variety of fields in which they compete.

Finally, Nintendo's aggressive move with 3DS was necessary because Nintendo were in serious risk of completely losing the market that has kept them afloat through immensely difficult periods in their past. If 3DS had not been rescued through such aggressive actions on Nintendo's part, Nintendo would be in serious, existential trouble right now.

In short, your analogy is deeply flawed. Microsoft are not Nintendo, and 3DS, Wii U and Xbox One all compete in the videogames market under markedly different circumstances. So no, it's not that simple.