If I want to purchase the unlocked Samsung galaxy nexus on Google play currently $399, should I wait for the price possibly to drop and wait till/if the phone gets an 5.0 update possibly in the summer or should in simply buy the phone now?
Also is it possible that Google will release another phone by the summer?

As the S3 has recently be released the price will decrease, but not rapidly.
Buying a smart phone is like buying a computer, there's always something better coming along in the future.

I'm very happy with my Nexus..

Yes but consider this,
On Google play the unlocked version is currently $399, although the price on Amazon is still about $340... I am afraid that Google play will stop selling phones like it did 2 years ago with the nexus one. What do you think?

I meant on Amazon the price is about $440

I think you're over analysing things.
Time to take a jump..