[quote name='ARsignal11']There is no way you can compare Nintendo's situation to Microsoft and Sony. Both of the latter companies have other divisions that rake in profit, so both of them have the luxury of being able to sell their hardware at a loss to acquire that install base. Obviously Nintendo only makes games, and as such, can't afford to initially lose money on the console like Microsoft and Sony can. Of course, I have no clue how much money they make of console sales compared to game/peripheral sales, but I imagine the profit from each console sale is more significant than you think because if it wasn't, I'm sure Nintendo would have released the Wii U at a lower price point. They've been around this long for a reason.
Now, whether or not the inclusion of the tablet was a wise decision, that's all opinion-based and can be debated in circles.[/QUOTE]
Nintendo makes endless money off merchandising not only their popular IPs, but they also sell other stuff such as playing cards (not a big money maker I suppose).
They also have over a billion dollars sitting around, so they are quite comfy, and could have easily taken a hit on the Wii U's hardware like Sony did with PS2 and PS3, losing close to $300 per system sold (!) early in those console lives. But they got cocky from the Wii selling amazingly well in it's first 3.5 years.
But that's the interesting thing about the gaming industry, just because you're on top now, doesn't mean crap when the next round of consoles goes on sale. It keeps things exciting, dontcha think?