selling the Wii at $250 is just a perk, they could in fact easily sell it at $200 or less and still make a profit. but as long as they can they might as well make an estimated $60-$90 dollar profit and continue strengthening their company giving them the power to plow through this generation. It's really a brilliant move on Nintendo's part. I can't help but laugh when people try and say nintendo is crook for doing this when if fact their product is still the cheapest no matter how you cut it. Trust me, If Sony and MS could sell their consoles at such a profit, you know they would, they only thing keeping them from doing so is that their consoles are so ridiculously expensive that they have to try and find a price that is appealing to the consumer, not a price that is profitable. Ironically it is probably the price tags of the 360 and PS3 that are helping the Wii look so cheap in the eyes of consumers. It's as if this generation was the perfect formula for the Wii.

 The Premium is already revealed to have a new price point within $100 of the Wii but I don't think it will ever get to the same price.  There is a chance that the Core will manage to match the Wii's price before the latter drops to $200, if MS doesn't finally pull the plug on the former before then.  But the Wii will always cost less than the Premium because it is simply cheaper to make and I doubt MS will want to go back to losing money on the hardware just for a "gotcha!"

Microsoft wins its fair share, it's just that the Video Game market isn't driven by the ignorance of the uneducated consumer so much as the PC software market is. With PCs, make it easier and Joe Computer-Illiterate will buy it. With Video games, there are many factors, hype, demographic, fanbase, etc. It's a balancing act that they only understand in theory and are working hard to put into practice.

Just be glad its going places in the name of enlightened debate and not all out troll flaming.

 I think it is more like comparing a Mercedes to a ford mustang. No one is going to try to say that $20k Mustang is a better car than the $50k Mercedes, but someone who can afford a Mercedes might end up buying a mustang just cause its so much more fun to drive. Personally I can afford a PS3, I have some interest in some of the games but the wii is a much better deal and has a cool unique controller. So I bought a wii and will wait till I can get a PS3 for like $200 and it actually has games.

Off topic: By the way I do have an '06 mustang and it is a lot of fun to drive plus the girls love it. They all want me to drive them around in it. 

Selling a product below cost is called dumping, a predatory form of market manipulation designed to undermine competitors and drive them out of the market. It's an attempt to establish a monopoly. I'd much rather a company make an honest profit with their goods than try to establish a stranglehold on the market so they can set prices where ever they like later.

 off topic: you are an ashole and makes me hateyou for all time because I don't have a Ford Mustang 06 and if I am going to import one to sweden the cost for a Mustang goes up with 50%.

(I hope you understand that I made a joke about ashole, it is just that I really want a Mustang )

Dumping occurs if a company exports a product at a price lower than the price it normally charges on its own home market.

As an example, if it costs Nintendo $200 to manufacture a Wii, and sells it in Japan for $250 but at $150 in the US to counter prices of the 360, then it would be considered dumping.

If it costs Sony $800 to manufacture a PS3 but sells is at below cost worldwide, then it is not considered dumping.

Printer manufacturers have been engaged in this practice for years (and barring Nintendo, so have all the other console manufacturers): They sell the printer (console) at a loss, expecting to recoup the losses and make a profit through consumables such as toners and ink cartridges (games, controllers). 

Even without the international trade aspect, it's still market manipulation. It's an attempt to artificially drive up demand for your product in order to create a legion of clients dependant on you as a supplier, whether you're supplying inkjet cartridges or video games.