If Software sells Hardware why Wii U flopped

[The_Liquid_Laser]

The simple answer is that software does sell hardware.  The Wii U didn't have a lot of software.  This reddit thread suggests the Wii U only had 165 physical games in North America.  That is not a lot.
https://www.reddit.com/r/wiiu/comments/6x9i5b/complete_wii_u_usa_physical_release_list/

The more accurate answer is that people buy based on value.  The Wii U hardware was a poor value.  The most obvious way to increase value is to drop the price, but Nintendo didn't do this too much.  The cheapest price for a Wii U was always $300 in NA.  The other really common way to increase value is to increase the library of games.  This is why people say "software sells hardware".  A bigger and better library actually increases the value of the system. 

Think about it this way.  System A has 5 games you want to play and costs $300.  System B has those same 5 games plus 5 more you want to play and costs $300.  Which system would you rather buy?  Everyone is going to choose system B.  It's because system B is the better value.  You pay the same amount for hardware to get access to more games that you want.

So, in the end, software does sell hardware.  Because the real guiding principle is that people want to buy the better value.  The more games a system has that you want to play, the more perceived value it will have for you.