regnad said:
Take a look, Nintendo:
http://www.gamefaqs.com/poll/index.html?poll=3991
There's a huge drop-off after $200. That's where you start losing customers, me included.
If you're so confident about your anti-piracy, you'll make up for affordable unit prices by selling lots of games. That is unless nobody buys it because it's too expensive.
Nice poll, but considering that hardcore early adopters account for 3-5% of the market, all they need to do is attract them first (that's easy). So the initial price will naturally be high to take advantage of that receptive market that cares less about price and more about getting the unit in their hands. Basic marketing strategy they all use to maximise profitability.
Someone in the boardroom then assesses sales numbers and decides where to take it from that point on. Price drops are always introduced after the initial surge of sales dies off as the early adopters have been catered to (with the higher prices).
The unit will be wildly popular, even though the PSP still looks to be a better all-round media playback device with its standard 16:9 screen. If they really push 3D and bundle it with an addictive 3D game that gets everybody talking, they will really win big and could afford to price it high for as long as the buzz drives sales.