Who's to say the Wii U will incur losses? Even with weak Western currencies, they may only take minimal losses if their nominal profit margin is broad enough.

They've assured that the WiiU will be in a similar position of the 3DS - catering to the hardcore Nintendo fanbase, and a price greatly exceeding the value. That is assuming *if* they attempt to price the console similarly to the 3DS (e.g. at a profit initially).

I just can't understand how they can lose so much money.

$220 million loss on 1.86 million 3DS shipped would suggest over $100 lost on each unit, which we know is not the case. So that's not the explanation.

Where do these losses come from? From Wii U R&D costs? Shouldn't be that high.

Mario and other SW sales should give hundreds of millions in profits.

The math isn't as square as all that. Lots of Yen losses are in there, muddying up the numbers, where revenue brought in from US and Europe becomes much less useful, while operating expenses are registered in Yen.

mass production of WiiU and 3DSXl units must count there i guess

I actually think the Wii U launch is going to be similar to the SNES launch / trajectory. They'll have a couple huge IP's at launch, but the gameplay innovation is far less than on Wii or DS (in some ways it's HD Wii + DS), so it will peak lower and earlier and then slow down faster for hardware, but in one or several regions I'd imagine software shipments will be similar to Wii as the attempt at "broader" software should be somewhat successful either in Japan (if it gets DS like games) or in the West (if it gets all the popular violent stuff, and Wii stuff).

Wii will probably end up around 110m lifetime (should be 97-97.5m through Sept, around 101m through Dec), I think it's conceivable that Wii U does better in Japan than Wii because it will be the second system after 3DS for much of its lifetime with Vita performing worse than PS3 and far worse than DS / PSP / Wii.

Vita - 830,000 (32 weeks in Japan)

3DS - 842,000 (6 weeks in Japan)

DS - 872,00 (3 weeks in Japan)

PSP - 842,000 (10 weeks in Japan)

PS3 - 828,000 (21 weeks in Japan)

Wii - 850,000 (4 weeks in Japan)

GBA - 935,000 (2 weeks in Japan)

PS2 - 910,000 (2 weeks in Japan)

GC - 795,000 (15 weeks in Japan)

N64 - 847,000 (28 weeks in Japan)

Wii U should certainly do better than Vita initially with NSMB & DQX both announced for it, and coming relatively early on.

huh? The Wii U is selling at a profit, they have said it multible times. As well as the 3DS XL

Do we get EU charts this time around?

And this is why they should have released a hardcore console. Core gamers are the only demograph that's stable. Casual gamers and children are fickle, and aren't dedicated to the industry and hobby as a whole. If the WiiU would have been a high end, hardcore gaming machine with regular controls, they would have won over the core. Third parties like ID and Valve would have abandoned the PS3 and 360 ect. Add to that Nintendo's own IP and you've got one bad *** console that any respectable hardcore gamer would be proud to own. Maybe the soccer mom's and the Wii fit people would move onto Kinect, but history show's that's a bubble waiting to pop. Nintendo would have stabilized their earnings, and also would have won back the trust they lost with hardcore gamers.

But what do I know?

Core gamers are increasingly entitled and impossible to please...not to mention increasingly high risk / high reward...and more and more difficult to profit from. Activision is THE ONLY routinely profitable western third party catering to core gamers, primarily because of COD & Blizzard.  EA / Ubisoft / THQ / Take Two / Majesco / Codemasters all routinely lose money, and did even at the peak of the cycle. In Japan, Sega, Namco-Bandai, and Konami are pretty well diversified and typically do profit, but Capcom / Square-Enix, Tecmo-Koei are more "core focused" ala the Western companies and also have tended to lose money.

Look at the last five years -

- 124 developers bankrupt because you need to sell 500,000 copies for a low budget PS3 / X360 game to break even, and 1-2m isn't uncommon for breakeven now.

- Sony has laid off over 20,000 people because the margins from it's gaming business have declined as Sony tried to catch up with Microsoft's core offerings

- Microsoft's EDD has had three years out of 12 in the video game industry of net profit

- Core gamer tastes have standardized around major brands. There are really only 10 core brands that matter globally, that routinely lead to increased corporate standing and power within the industry (typical entry > 5m). You can be under 5m and profit obviously, but the games below are the ones that sustain innovation and pay for flops.

Capcom (Resident Evil)

EA (Madden, Fifa, Battlefield)

Activision (Call of Duty)

Square-Enix (Final Fantasy, Dragon Quest)

Ubisoft (Assassin's Creed)

Konami (Metal Gear)

Take Two (GTA)

- "Casual" gamer tastes have also consolidated around major brands in the past five years although it is more unstable.

Majesco (Zumba Fitness)

Ubisoft (Just Dance)

Nintendo (Wii series)

Microsoft (Kinect series)

Harmonix (Dance Central)

Activision (Hero games)

EA / Harmonix (Rockband)

Nintendo can theoretically bridge the top stuff from both worlds better than Sony or Microsoft, but it's still not an easy thing to do. A healthy Wii U though could have, at least in theory, all of the following 5m level hits that could be up for grabs or at least up for port:

FF, DQ, RE, GTA, AC, Fifa, Madden, Battlefield, Metal Gear, COD...Just Dance, Zumba, Wii series games (Fit, Sports, Sing)...and then 2D Mario, 3D Mario, Zelda, Mario Kart, Smash, Mario & Sonic, Mario Party, and Nintendoland.

DQ (5m on DS), RE (1-2m on GC / Wii), Madden (about 1m each iteration on Wii), Metal Gear (1m ltd likely on 3DS) and COD (1-2m) are all known to do respectable numbers (1-5m) on recent Nintendo platforms so I don't think it's a huge leap for Nintendo to try to get most of them.