Let's be honest, Nintendo had to know that Bayonetta 2 would probably be a "flop" from a financial perspective. I would be very surprised if Nintendo is on tab for the full budget. Wasn't a lot of work done even before Nintendo came on board?
Regardless, I don't think Nintendo's aim with Bayonetta 2 is to make a mint from the software, but instead use it as a lure for core gamers who found the Wii to be lacking in variety. It's a calculated play for a certain demographic. In that light, they probably considered it an investment that went beyond simple unit sales. Nintendo will measure Bayonetta 2's success instead by how many gamers they steal from Sony and Microsoft. If the game doesn't spark much interest from the non-Nintendo core, and it doesn't end up as a financial success, I doubt Nintendo will worry much about a Bayonetta 3.
However, this could be a really good situation for Sega, depending on the language of their agreement with Nintendo. If they've kept full control of future installments of the franchise, they could fund Bayonetta 3, release it on ALL next-gen systems, and possibly do quite well. That's what should have happened in the first place, except Sega kind of sucks.
