Nintendo confirmed everything.

"During the second quarter of this fiscal term, we have successfully eliminated the situation that we sell the Nintendo 3DS hardware below cost, which was the main reason our corporate profits fell in the last term. However, as we are in the phase of concentrating our development resources on software for the Nintendo 3DS system, which is still in an earlier stage of penetration than that of Nintendo DS, and as we have not yet launched the Wii U system, it is difficult to increase the total sales of software, which is generally profitable. In addition to the yen’s continuous appreciation, the Wii U hardware will have a negative impact on Nintendo’s profits early after the launch because rather than determining a price based on its manufacturing cost, we selected one that consumers would consider to be reasonable. In this first half of the term before the launch of the Wii U, we were not able to make a profit on software for the system while we had to book a loss on the hardware, which is currently in production and will be sold below cost. Our loss has therefore widened during the second quarter in spite of bringing the Nintendo 3DS hardware back to profitability. Although we expect our financial performance to be revitalized, under these circumstances, unfortunately we cannot say that we will achieve “Nintendo-like” profits within this fiscal year."

http://www.nintendo.co.jp/ir/en/library/events/121025/04.html

Its sad :( But hey atleast they will make a profit by year's-end :) Which in part will be due to the 3DS being profitable. Furthermore, come to think of it, the Wii was profitable because it used some of the hardware from the gamecube. Wii U does not have that luxury. 

Sold at a loss in Japan and North American regions but sold at a profit in Europe and Other regions around the world to offset the loss of the main two regions,

Does this confirms that the WiiU is significantly more powerful than current gen consoles? lol
I dont see the deal, Nintendo has plenty of cash to play with, first year small loss, second year profit sounds about right

Yep the lack of power got it 97 million units in sales. Should have been weaker.

He is refering to the lack of third party support.

I knew this price didn't feel right. Maximum pressure in Kyoto this winter...

Yes, I agree, we'll have to wait and see, and I think it unlikely PS4 will be a beast like the PS3 was at its launch.

However, with WiiU @ 299, a 399 PS4 could potentially be quite a lot more powerful, especially considering the WiiU gamepad. If Sony don't go for something like that and release PS4 @ $399, that would allow them around $250 to invest in making the system more powerful, PLUS whatever technological advances the extra year (or 2) might yield. I see the potential.

Then again, I also see how it would not play out like that.

.....
The important part of that article was completely missed.

"Chief Executive Officer Satoru Iwata, 52, reduced the full- year net income forecast 70 percent "

Nintendo are finally getting bitten for continuing bad market practise in an evolving market.

Hmm good spot. 70% reduction...fuck.