According to an analyst from Credit Suisse, Nintendo's manufacturing costs for the Wii are almost half of what they were when the console launched. Gamasutra has reported:
There are a few takeaways here. First, it's important to note that out of the three major consoles, only the Wii was profitable from day one. Microsoft and Sony sold the Xbox 360 and PlayStation 3 at a loss when it launched those consoles, respectively. If Tabata's figures are accurate then Nintendo has been making a hefty profit from the millions of Wii systems it has sold in the last few months.
Secondly, as the quote suggests, Nintendo has plenty of wiggle room for a price cut. Although sales in North America and Europe are still strong, the Wii has been slipping in Japan. A price cut centered around key software releases should reverse the trend.
The Wii gets a lot of heat from readers of TheFeed. A lot of you don't have Wii systems, but would you pick one up if it were cheaper? Or does its software library and lower-quality graphics turn you off?