Wii sales where always profitable, because Nintendo did not subsidize the Wii. More importantly, sales late in a consoles life cycle are worth a lot less because the company's get a cut of game and accessory sales and someone that has a console for longer probably buys more games or at least more new games. People who buy late have a lot of great cheap games to keep them entertained, where someone who had the console from the beginning probably already played those games and is therefore interested in new titles.

Which is why the subsidy decreases over time.