Why WiiU is making a (small) profit for Nintendo

[UncleScrooge]

Lusche said:

Conina said:

... if the WiiU is sold for the official price tag.

But you can buy the Wii U for over 100 $/€ lower than the offical price.

I think the price cuts aren't official ?
so the loses would hit the retailer and not nintendo ?

also I think its only in europe where the wiiu is sold 100-150€ below official price.
its still the official price for the us ?

Nintendo's projections were based on high sales (Wii level sales actually) so all those calculations are worthless now with sales so low.

Lower sales lead to higher production costs per unit than projected. Also, things like marketing budgets are fixed so the marketing budget stays the same but profits from sales are lower than projected. And of course work force, warehouses, development costs, etc. are fixed costs too. Nintendo's fixed costs didn't decrease but revenue from sales decreased a lot. For instance if 2m customers bought a Wii U + Pikmin + Wario that would've made them a profit. But if only 500k people buy the same combo Nintendo bleeds money because Pikmin 3 needs to sell more than 500k units to cover its dev costs.