I disagree; based on Iwata Asks interviews, the idea behind it was that the packed-in software was going to drive sales, and the take-away inside of Nintendo is that Wii Sports worked as a pack-in.

The Wii would have sold as much over the first few years without it as a pack in given the perenial shortages. Effectively the Wii was under-priced given their inability to make enough consoles. Had they gone for something a little bit more expensive and a bit more sprightly under the hood their revenues/profits would have been higher again and likely the tail end of their sales would have been flatter with more generous margins even if the price curve had remained the same.

My point is that Iwata has indicated that Wii Sports as a pack-in is what helped to drive sales, and they would not sell it separately given a choice.

Didn't Iwata also say that they increased the price of the Wii from $199 to $249 and included Wii Sports as a value adder when they found out about the PS3's price?

The Wii would have sold as much over the first few years without it as a pack in given the perenial shortages. Effectively the Wii was under-priced given their inability to make enough consoles. Had they gone for something a little bit more expensive and a bit more sprightly under the hood their revenues/profits would have been higher again and likely the tail end of their sales would have been flatter with more generous margins even if the price curve had remained the same.

in FY 2001 MS were researching ect, but that wouldn't have come close to $1 billion surely. I think counting from FY 2002 is better.

Edit - my mistake it already does

Nintendo holds much of its profits in foreign currency. If those currencies do poorly then eventually, Nintedo has to make adjustments to compensate.

After your basic agreement with my original thoughts, i hate to disagree now...

But, i think he was right about Wii Play.  It is what really showcased the originality of the system, thus becoming the real reason for the systems success.  I think that most of the big hits on the Wii have been unrelated to the motion control(except the WiiFit/Wiii Sports).  Most of Nintendo's cast of Marios and Zeldas will sell no matter what system they are on with or without the motion control.  It just helps to have such a monstrous install base to sell into.  Sure most of the games have motion control in them, but it is not essential, it just seems that they have it for the sake of having it.

 Either way, WiiPlay was essential to its success until it passed into Lemming status(about 6 days after launch!!).

The importance of Wii play is this:

Person buys one Wii with Wii Sports $249

Person buys one Wii play with Wiimote $50

Person walks out with two games, two Wiimotes for under $299.

People always forget that it isn't what it costs to buy the system but what it costs to walk out with enough to satisfy the end users. The added value was the fact that it represented a 2nd game for an additional $10 because I doubt many people bought the Wii with one Wiimote initially. This is the reason why they do so many bundles at Christmas, like for instance the 2007 3 game bundle for the Xbox 360.