Nintendo’s Wii U is a capable little game console with a nifty touchscreen-equipped GamePad controller, but one thing it’s not is profitable off the bat. Traditionally, most console hardware is sold at a loss at launch because of high-cost components that provide cutting-edge graphics and processing power. To put it into perspective, it took five years for Microsoft’s (MSFT) Xbox business to become profitable and four years for Sony’s (SNE) PlayStation 3 to get out of the red. Nintendo’s modus operandi has always been to make a profit on every console it sells, so it was shocking to hear the Wii U would be sold at a loss. But Nintendo of America president Reggie Fils-Aime recently sat down with MercuryNews and set the record straight, explaining that the Wii U isn’t losing much money per unit sold. 

According to Fils-Aime, “as soon as we get the consumer to buy one piece of software, then that entire transaction becomes profit positive.” Fils-Aime didn’t comment on whether or not the $349.99 Deluxe Set that includes a copy of Nintendo Land is immediately profitable, or if the extra charging cradles, dock, and extra storage would offset the Wii U’s profitability.

iFixit’s recent Wii U teardown supports Fils-Aime’s claims by revealing the console uses a larger optical drive over a slim one and a bigger processor die to keep manufacturing costs down.

The Wii U launched on November 18th in North America and is still sold-out virtually everywhere. Fils-Aime has promised there will be more shipments of Wii U consoles coming in time for Black Friday and remains confident Nintendo will sell 5.5 million consoles in the current fiscal year.

Raymond Wong is a technology reporter with a passion for cutting-edge gadgets and clean design. He first realized his love for technology when he burned through so many AA batteries on the original Game Boy that scraping battery acid off it became the norm.