Nintendo used a recent Nintendo Direct to clarify the Wii U storage options, how games are stored, how much free space each Wii U version has, and more.
The Wii U operating system, the account data, etc., will take up 4.2 GB of internal storage space. Each Wii U is preloaded with this data, which means that the 8 GB Wii U version will only have about 3 GB left for save games, downloads, and such. This is because when the 8 GB is formatted, it ends up with 7.2 GB of usable storage. Then 4.2 GB is taken up by the console itself.
We can’t say that we’re surprised that the Wii U operating system and all its features take up this much space. Nintendo has reserved 512 MB of RAM for the OS, which is just as much as the total system memory in the current generation consoles (Wii U games will have an additional 1 GB of RAM available).
The Wii U Deluxe version will ship with 32 GB of storage. When it’s formatted, it will have about 29 GB. Minus the 4.2 GB of system data, this means that the Deluxe version will have about 25 GB to store games, save games, downloads, and more.
Users will likely have to expand with external drives if they’re looking to download a lot of content, since Wii U games will take up quite a lot of space. Nintendo Land takes up 3.2 GB, which means it won’t fit on the 8 GB Basic Wii U. Other games will take up much, much more (the Wii U game disc can store up to 25 GB).
Nintendo recently confirmed that games can only be stored on external USB hard drives, not on SD cards. SD cards, of which the Wii U supports up to 32 GB, can only store save games, Miis, images and similar data.
Source (Nintendo Direct)