Just the consideration of this is a huge red flag. It shows a lack of confidence in their own product.
I laughed seeing how Sony erased pretty much all of their PS1 and PS2 profits to sell the PS3, but I would have never imagined that Nintendo would take a similar path.
Rol its sad to see you turn so illogically anti-Nintendo as of late. The negativity is truly shocking especially from someone who always claims to know exactly whats going on.
It does not show any red flag in fact it is a relief. The PlayStation 2 launched at a loss and made a shit load of profit sure not as much as GameCube did but it ended up being the most successful home console ever made. The Xbox 360 was also sold at a loss and has managed to make a shit load since it broke even.
I am pretty damn sure that Nintendo will sell WiiU at 300$ and it will be sold at a loss. I would estimate that loss after currency exchange will be between 50-100$. This loss is necessary to make the WiiU a capable competitor and still sell hardware.
I disagree with some statements that the WiiU won't be noticeably more powerful then 360/PS3. From what EA has said BattleField's PC version could be played on WiiU. (Can't find the source). Other rumors suggest WiiU will be a minimum of 50% more powerful then PS3 but rumours have suggested it could be multiple times the power. EA has stated that the FrostBite2 engine they used in the PC version of BattleField 3 is in line with PS4/Nex-Box, saying the engine is future proof. This strongly suggests that WiiU will be similar powered to PS4/Nex-Box.
I think Nintendo needs to ensure they future proof WiiU as well. That means more powerful hardware then what has currently been announced. We do know that if WiiU is only 50% more powerful then PS3 that it will definitely lag behind Nex-Box and PS4. So is Nintendo beefing it up last minute? EA has stated they don't know how powerful WiiU will turn out in the end. Reports have come in that the console is evolving with every dev kit so the graphical power and such is probably still being ironed out.
Also the controllers are expensive. Lets face it Nintendo needs to bundle them with the console at an affordable price.
Then lastly look at 3DS, it was a drastic improvement over DS. The 3D effects were amazing and Nintendo even launched what Rol has stated is one of Nintendo's major and most important franchises (Nintendogs) at launch. Yet the console despite having this "Major" title failed to generate many sales at all.
Fact is Nintendo needs to launch at a 300$ price point without compromising the quality of the hardware. If the console launches 400-500$ then Nintendo is screwed. The hardware won't sell at that price and I doubt Nintendo will turn a profit at anything less then 399$ if they don't cut quality corners.
In the end it is understandable that Nintendo take a small loss on each WiiU. I am betting Nintendo is working on cutting costs as we speak to make the loss minimal. I'd expect no higher then a 100$ loss which will put it in line with 360's launch and far lower then PS3's. Also at 300$ Nintendo will force the competition to also launch at a loss which in turn will help them remain competitive!
I see the launch at a loss of 100$ or less as a very good thing for the market. Nintendo has always turned a huge profit on software that compensates easily for up to a 100$ loss. Also remember that third parties will be watching the launch closely and Nintendo needs to impress them. If Nintendo fails to garner third party support we will have a GameCube all over again. Nintendo's first party capabilities just aren't good enough to support a platform entirely on their own!