The authors analyse the performance and device physics of nitride laser diodes that exhibit the highest room-temperature continuous-wave output power. The analysis is based on advanced laser simulation. The laser model self-consistently combines band structure and freecarrier gain calculations with two-dimensional simulations of wave guiding, carrier transport and heat flux. Material parameters used in the model are carefully evaluated. Excellent agreement between simulations and measurements is achieved. The maximum output power is limited by electron leakage into the p-doped ridge. Leakage escalation is caused by strong self-heating, gain reduction and elevated carrier density within the quantum wells. Built-in polarisation fields are found to be effectively screened at high-power operation. Improved heat-sinking is predicted to allow for a significant increase of the maximum output power.