Back in 2015 it was reported that Nintendo had $4.6 Billion in the bank as a reserve or "just in-case". That $4.6 billion in the bank earns interest and even at these incredibly low interest rates Nintendo is making a nice fortune. 

Let's say they are earning a 1% interest a year (which at this point is probably the lower end, 1.3 - 1.4 % might be closer). At 1% Nintendo earns 46 million dollars a year. In a earnings report Nintendo stated "We need to sell 2 million to break-even". Take out of account the money retail makes when selling games and you got yourself a 40-50 million dollar game. Fun Fact. I like how they save their money :) :) :) That is awesome.

Wish I had 4.6 billion$ just as a reserve, anyway it's amazing how scaled back the cost for botw is , considering the huge expectations capcom always seems to have.

Which makes the fact that they refuse to lower their margin on their hardware and software even worse. They really are the Apple of console gaming.

For a first party, especially Nintendo, the cost of marketing is higher than the production cost.

For BotW they built an entire E3 to it, and marketed a console launch around it. If you do the math 2 million would get them about 80 million, half of which probably went to marketing, 5 million minimum to global publishing. So the game might have cost around 35 million.

Remembering that BotW was an experimental game for Nintendo.
Nintendo very likely had to spend a decent amount BotW's budget on R&D; investing in the future of the Zelda franchise.

What did you expect?

They are a listed company that, like all other companies, have to create returns for the owners, not a charity.

They only charge what the market is willing to pay for their product, they owe ”you” nothing. It’s business 101.

I wonder how they lost that much within a few years. I could see the failure of the Wii U and the struggles of the 3DS making an impact, but $2-3 billion impact? Either it is because they started making more investments around 2013-14 (i.e., starting R&D on mobile, theme parks, etc.) or something else came up.

A failure like the Wii U can burn trough that money at frightening speed - just look up how much money the PS3 was burning for Sony, if they hadn't other fields of income Sony would have gone under within it's first years of the PS3. The Wii U did cost Nintendo quite a big part of their reserves in fact, so it's clear they need some sort of lifeline. Since they don't have any other big sources of income the only choice they have is limiting expenses, which means they can't really afford to subventionise their consoles nearly as much as Microsoft or Sony do.

As for the software, afaik they are asking about the same as their competitors in terms of royalties, so I don't see any problem here.

Yeah I'm at a loss as well. I always thought Nintendo sold their consoles at a profit so even if the Wii U sucked, they still would have made money... Even with that the 3DS is a huge success should have offset the loses. Someone was definitely mishandling the money. Mario Kart 8 sold over 7 million, Smash Bros sold 5 million, and various other titles sold over 4 million. 

^ They were at 10 billion in 2008... wtf did they do?