They are problably refering to marketing cost on the system. Like, if they made a loss of 10$ at each unit sold, they would need  to sell a game to break even on hardware manufacture cost and another one to conpensate marketing expenses. Now, if they manage to make a 10$ profit at each unit sold, the marketing expense got covered by this manafacture cost and they can make money from the games sold.

Yeah, I guess we won't know for sure until Q4 comes. I'm pretty sure they'll increase focus on good online deals as well during that time and a MK + SSB bundle could do very well. They should be careful about extensive bundling though, they are essentially giving away their games for "free" and this is bound to eat up profits as well. I think we should expect one more FY of losses before the numbers turn black again, especially if they're currently doing as much R&D as I think they are with new platform(s) and the QoL extension/third pillar.

For my part; I'm hoping for a decent MK bundle at a lowered price next year since I have two generations of Nintendo 1st parties to collect (I never got a Wii).

I'd wager they're being conservative because of how badly wrong they've been with previous forecasts. At this point, given how many estimates and sales guidances they've got wrong, Nintendo's management can't be sure of their reading of the market. A conservative estimation is a reflection of that; Nintendo can't be certain their software and ideas are going to improve the situation for Wii U beyond the modest bump forecast.

They can always revise these figures. It wouldn't exactly be unprecedented.

This piece of news makes me very happy!

I'm just going to say this again because the people who make the 'hardware costs too much for low-specs' argument need to use their brains and research instead of spreading ignorance. The Wii U is very powerful, and since the design eschews blu-ray, media capabilities, and other bells and whistles that Xbox and PS focus on, the budget is dedicated to the controller and gaming performance. For the thousandth time, the clock rate of a CPU doesn't really matter anymore these days as long as efficiency is there. A 1.6 Ghz. Core i7 from 2008 (first-gen) will handily outperform a Pentium 4 at 4 Ghz, or even a Core 2 series at a higher clock speed.

We won't know exactly what enhancements Nintendo made to the PPC 750 base architecture, but even a 1.4 GHz. 3-core PPC is more efficient than what's in the others. It's common knowledge by now that x86 is an inefficient gaming architecture as compared to PowerPC. In some cases, the Wii U processor can outperform the newer consoles in certain areas. But it's the ESRAM that is making all of these 1080p games possible, or at least the 60fps. Everything in the Wii U is balanced, and they work together as a cohesive whole.

Long story short, the Wii U may not have Ronaldo on the team, but the parts inside work together and play like the Bulls did this season without any big stars.

Nintendo is now in a position to just make profits. That should put a band-aid on their operating loss and post a profit.

Yes, its very efficient design but only useful if they take advantage of it by coding the game around this architecture which is possible only with First party. So, 3rd parties need easy development environment and reasonable hardware close to the other platforms to develop otherwise there are gonna skip which is happening now.

the Mario Kart 8 bundle is $329, i think it will drop to $299 by the holidays, other than that i think there wont be a price cut this year.

No, it's not independent:

From the Q&A:

"With respect to the impact of Wii U hardware sales on profit and loss, in order to sell 3.60 million units, we have to produce some more hardware units on top of our current hardware inventory. However, since the loss arising due to the hardware production costs being higher than our trade price was taken into account in the previous fiscal year, you could assume that there will be almost no loss this fiscal year for the sales of the 3.60 million hardware units."

Source: http://www.nintendo.co.jp/ir/en/library/events/140508qa/index.html

Well, the Q&A has been released in English, and as expected the reality isn't as simple as the Wii U is now profitable.

The quote was

"With respect to the impact of Wii U hardware sales on profit and loss, in order to sell 3.60 million units, we have to produce some more hardware units on top of our current hardware inventory.  However, since the loss arising due to the hardware production costs being higher than our trade price was taken into account in the previous fiscal year, you could assume that there will be almost no loss this fiscal year for the sales of the 3.60 million hardware units."

It seems that a devaluation of their current inventory of Wii U's occured in the previous fiscal year.  So they are still being sold at a loss, it's just that accounting wise, the loss was booked in the previous fiscal year.  Also, "almost no loss" is still a loss.  So even with the devaluation of their inventory and their projections for the costs of Wii U's still to be manufactured, they aren't projecting profitability for the Wii U hardware over this fiscal year.

There are also other factors that I have discussed in my previous posts.  For example, the Mario Kart bundle will likely comprise a significant portion of hardware sales and it is being sold at a higher price than the previously available bundles.

http://www.nintendo.co.jp/ir/en/library/events/140508qa/index.html