Thoughts Summary
Since the Wii only costs around $158 to make, dropping the Wii to $200 would still yield a profit for Nintendo.

By unpacking Wii Sports from the Wii, a $200 price drop could mean little difference in profit for Nintendo.

While a $200 system without Wii Sports would yield slightly decreased profit per unit, more people would theoretically have a Wii.

With such a small profit difference between the $250 and $200 (non Wii Sports) system, the fact that more people would purchase a system at $200 would mean more games and accessories should be bought, thus not only making up the difference, but increasing the profit.

Nintendo could price their DVD-enabled system at $250, thus keeping it within reach for that casual and non-gamer demographic. By keeping it under $300, Nintendo will not need to compete so close with the 360 in price (assuming a pricecut comes for the 360), and both the DVD and non-DVD system will be a reasonable purchase for less-involved consumers.

Nintendo already said the Wii will not exceed $250, so if Nintendo releases the DVD-enabled console in the United States it will HAVE to lower the cost of the base unit, to sell the DVD-version for $250. Of course, Nintendo could just opt to make all Wii consoles DVD-enabled at that point instead.

Nintendo was thinking outside the box with the DS, and especially the Wii. It would be foolish to assume they wouldn't do the same in the marketing realm.