http://www.infendo.com/nintendo-3ds-wont-be-sold-at-a-loss-s...
The tradeoff they made was using significantly cheaper, lower-performance hardware, skipping HD and leaning on the uniqueness of the motion control tech to move units. It proved to be brilliant, and while Sony and Microsoft's console business struggled for years, Nintendo's been raking in the profits.
Unfortunately, the Nooks have tried to compete on hardware features and don't have any disruptive technology equivalent to the motion controls. The Kindle is the simplest, cheapest ebook reader out there, so if their competitors want to do a loss-leader strategy, they'll need a bigger subsidy than Amazon.