EDIT after E3: Now that E3 has passed I wanted to revist this thread to see how things are going. Items below are color coded based on facts and what is still unknown.

Things right:
1. screen controller with dual analog base setup.
2. at least equal to current HD systems.
3. Video/Game playback on new controller while TV in other use.
4. Large storage solution (though usb HDD or SD cards)
5. WifiN
6. More media playback (demos showed browser and netflix at least)
7. Fully backwards compatible with all Wii accessories/games
8. Will get same 3rd party support
9. High capacity media disc for games

Things not true or false yet:
1. More powerful than PS360 in order to be withing range of next consoles similar to PS2 and Xbox/GC
2. Android apps capable
3. Far better online connectivity to rival / surpass Live/PSN
4. Overall system UI
5. Natvie media playback (video / music)

Things proven incorrect:
1. 3D in the controller
2. No SD card support and built-in HDD
3. Bluray drive

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EDIT: Now that the next Wii has been officially confirmed... please take the time to read my OP. I think it carries more wieght now and will be resoundingly proven come E3.

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First off, yes, this is a large OP. However, I think those of you that read it will find it enjoyable and I hope you’ll provide solid responses. (btw I wrote this in word before Ubisoft rumor was posted)

We've all been interested, with various results, regarding the various rumors about the next Nintendo system. (I refuse to say Wii2 or WiiHD... maybe Wii3D)

We've all heard its potential power range, screen enabled controller, Wii and GC backwards compatibility, etc etc. Well let's sit back and really think about this when taking into consideration Nintendo's past as well as its present. Especially in the one area Nintendo has always dominated; handhelds.

First let’s think about some things I think are givens at this point.

Lessons Learned

Cost. A $600 system will NOT quickly pass the competition and dominate the industry. Regardless of how many additional features it contains or the name stamped on it, the mass consumer will not get two jobs just to own it. Sony demonstrated they learned this lesson by removing various features (hardware and software) just to reduce its cost so it could be priced more competitively to its competition and once that was achieved, it finally began to not only be profitable, but also highly competitive.

The casual customer is just as important, if not more-so, than core customer and with that, earth shattering specs are not the primary factor. Wii’s unmatched explosiveness by focusing on a new way to play with a far inferior base technology (in raw crunching terms), demonstrated you do not need to be cutting-edge to be successful and an industry leader. Instead, Nintendo focused on its Blue Ocean strategy and went after the significantly larger casual customer. Microsoft (MS) and Sony both learned this lesson. While they maintained the far stronger 3rd party support, they will never match Nintendo’s sales numbers, as they largely ignored the casual customer, and especially profitability, as they sold high-end tech with massive per unit losses for years, with their respective consoles.

3rd party exclusiveness is non-existent due to far higher development costs. This is really a two-fold lesson here. MSony and 3rd parties at large learned that as games moved into HD visuals with ever more complex AI and environments, development costs skyrocketed. With that, they had to focus on a wider range of consumer base in order to make a decent return on their investments. As such, this is the first generation where very few 3rd party games were exclusive. Therefore they must focus on 1st party games to differentiate themselves from competitors as pretty much everyone would have the same 3rd party games… or payout a very large bounty to make the game exclusive for at least a timed release.

The second lesson in 3rd parties was learned by Nintendo. Even when you are 50% of the entire market and showing no signs of slowing down (2008), you will not gain the best IPs 3rd parties have to offer if you do not have the hardware to power those IPs in the manner the developer wishes to create them.  Wii’s userbase was about equal to PS360 during its peak sales years and once you include the potential sales from a PC port, you certainly have no reason to create a largely inferior version of your best IPs for an older technology base. Nintendo simply gave 3rd parties no reason to spend the costs to produce a lower quality product. 3rd parties knew they had just as much probability to make the same profits on the PS360/PC version of a game as an exclusive Wii version. However, focusing on the higher technology bases allowed them to continue to push their limits and create an experience they sought. Nintendo learned they must be relatively equal to their competitor’s technologies in order to share 3rd party support.

With these lessons of a reasonable selling price with an initially profitable (or near profitable) system that contains technology that is within a relatively similar base as your competitor’s; I see Nintendo making these base competitor assumptions.

1. MS and Sony will not create a system that launches for more than $400.
2. The technology will not be the massive leap in capabilities relative to what PS2/Xbox saw in comparison to PS3/360 in order to keep the costs far lower and potentially enabling the system to launch with a small profit or a small loss. (Vs. the $200 loss per unit that was estimated at the launch of the PS3)
3. They will incorporate their standard controller as well as advanced versions of their motion devices to capture more casual market as well as expand on what they gained with Kinect and Move.

With these assumptions and the leaked rumors, let’s discuss Nintendo’s general platform with their next system.

Controller

Nintendo has always created the major shifts in controller design. Something EVERY manufacturer has copied in various forms. d-pads, shoulder buttons, analog sticks, vibration, wireless (1st party), 4-player on console, motion, and now ….?

We know Nintendo will change the controller, they always do. To them, how you interact is just as important as what you're actually playing. In fact, how you interact has always defined what you're playing when it comes to Nintendo. The games they want to create force them to create new control schemes. From simply more choices, to direct physical feedback, to 3D movement, to true physical representation; they always create a new interface in order to bring out amazing gaming experiences.

Wireless will be a given. There's no need to go into this. Additionally, I think built-in batteries will become the standard. (This is a blessing and actually big thanks to Sony)

Nintendo will make their system 100% backwards compatible with Wii and its controllers. This enables them to offer a major benefit to those who have spent a lot of money on the many accessories the Wii has had. From wiimotes, motion plus, and the balance board; it will all be fully useful in this new system. Basically, there is no need to create a new motion device as its perfectly utilized with the motion plus enabled wiimotes and nunchuks. These will simply remain available to purchase and a lower price point as add-ons.

The standard controller will move back to the more standard controller. It will adopt the classic controller pro overall form factor; very similar to the dual shock Sony controller. However, as rumors have stated there will be one very significant difference; a screen.

First let’s remove some of the barriers others have mentioned with this idea. Cost won’t be a major issue. Nintendo already has a very low cost solution for a high resolution screen that can easily be adorned with a touch panel; the 3DS’ top screen. This screen is already in a very high demand and will have a very low cost associated as it will be in tens of millions of 3DS hardware. Size will also be a non-issue as the 3DS and DS themselves prove that the size of the device with a screen in the center is still very comfortable and light. There is no reason comfortable and affordable (~$50) controller with this screen could not be produced.

Now, let’s think about the benefits of such a controller. You immediately remove any 3rd party issues with crazy controller configurations as you match the base setup of your competitors.

You also have a unique feature that has amazing benefits that is already utilized in the DS line. Developers will love the ability to add unique features for this screen in multiplayer scenarios or menu needs, etc.

Finally, Nintendo gains an ability that was lacking in the Wii/DS era; true compatibility between the devices. Previous systems had the ability to connect the handheld and home consoles for game play. Wii and DS never obtained that same level of interoperability due to huge differences in device design. With a controller that has a secondary screen with touch capabilities, you have a perfect cross over device. With that design, the 3DS could even be the controller for many games. Allowing you the ability to play a 3DS game on your TV wirelessly with no additional cost.

This is a great feature and one Nintendo should strive for as it pushes consumers to buy both devices.
Finally, one other benefit I potentially see is a new way to play on a home console; 3D. Nintendo has stated many times their interest in 3D. They tried, and failed, with Virtual Boy. They are trying again with a far better solution in the 3DS, and so far it’s proving to be a success. Well, with the costs already front loaded into the heavily profitable 3DS, it’s very possible that they’ll have a low margin controller that also has a 3D display. This allows Nintendo to give the 3D glassless capability to home users while ignoring the one part they cannot control; the TV. This allows head-tracking and many other potential game-changing (pun intended) new ways to play Nintendo always tries to pursue.

Hardware

The 3DS launched $100 more than the DS. Not only is it the most expensive handheld at launch Nintendo has ever done, it’s tied for the most expensive launch Nintendo has done with any product. Wii also demonstrated that Nintendo could have sold it for $300 as they were going for well over $400 on Ebay for the first couple of years.

Considering the lessons learned, Nintendo will want to create a system that will be relatively comparable to what MS and Sony will create next. They will strive for something that exceeds PS360, yet will be priced $350-400 with a small profit (as Nintendo will not sell for a loss). It will also be fully backwards compatible with the Wii in order to make upgrading an easier sale for tens of millions of current customers.

I expect a 4-6 core IBM power pc cpu as well as the current Wii cpu to ensure that it will be fully compatible while moving closer to the base architecture Nintendo believes their competitors will have enabling easier development for 3rd parties as the Gamecube and Wii’s architecture were notable more complicated.

It will contain a multi-core gpu unit built by NVIDIA that will be 3-4times more powerful than what is in the 360 but still compatible with what the Wii contained, again for backward compatibility.

The final major component will be 1GB (to 2GB) of RAM. PS360 both have far less than this, but it seems highly likely this is where they will go next as its cost effective and will be needed for next generation of games.

I’m not going to get into the more technical details of architecture and so on, but the idea would be a dual purpose design that would enable full backwards compatibility to Wii as well as a change in what Gamecube and Wii had in base architecture to be more compatible with what is known MS and Sony and largely the PC realm will move into.

High capacity disc format for games; Nintendo has never focused on media playback. However, they have proven with additions to Wii’s online services (Netflix and nonUS services for video/tv) as well as the DSi and 3DS’ native media capabilities that they are moving in that direction. With that, I see a bluray drive being included and video/music playback native to the console.

With this also comes the improved network enabled capability as well as need for a larger storage system. Wifi-N will be standard as will a size-able hard drive. 250GB would be my maximum size I see shipped with a unit. But, that will depend on the market as costs per/GB dictate the size. This is the reason MS and Sony have continuously upgraded their HDD sizes. Over time it actually costs more to provide a smaller drive. However, I do see Nintendo being more like Sony in that it will not be a proprietary drive. It will likely be a standard HDD that is easily upgradable if the end user chooses.

It will come standard with component connections and HDMI as an option as well as a couple USB ports.  With the Wifi-N and HDD, it will not have a LAN connection or SD Card slots.

Online and other Software

The final and vital part of this kick off of the next gen is what it will offer in UI and online. They will want to continue the familiarity with Wii and with that the channel idea will return. This was a great idea and really easy to navigate and utilize. Additionally, it can be improved with deeper channels. For instance, instead of one channel per game, you will have the ability to create channels in order to categorize items, i.e. folders or containers of channels; like a NES channel or SNES, etc.

This is also demonstrated in how 3DS works. It contains channels as well; however, they have been named apps in order to be more easily understood by most users who are familiar with smart-phones. This naming convention will probably continue and “channels” will be apps.

This leads into the next big feature, apps! The system will become more of an Apple or Google TV experience as applications are created beyond simple browser or pictures. You’ll have many 3rd party app choices and I do believe it will take the queue of Sony and RIM. Nintendo will form an agreement with Google’s Android system where Android applications will be able to run natively in the system. This is a low cost solution to providing an immense amount of applications for the end user.  Tie that into the touch screen enabled controller and you have a perfect extension of features and possibilities. Technically, this may be a final feature that the 3DS has yet to be revealed. Nintendo never went into great detail of the future of their apps for the device.

Finally, I think the online gaming environment will be greatly upgraded to be more in-line with PSN and Live; including the full removal of numbers. 3DS still contains a number, however it’s one per system vs. per game; the 3DS is still a portable system that is likely only used by one individual. The next console will of course be more communal with numerous users and as such would require numerous avatars/gamertags/ids/etc. As such, I see an overall far better invite/approve system that utilizes the next generation of Mii’s.

If you read all this, thank you, and I really look forward to your responses, however I look far more forward to this year’s E3 to see how close I really am.

You lost me at "first"......

nah jk ill read it later =p, gonna sleep first though.

I read it cause your writing was interesting. :P

And it seemed pretty logical.

I don't particularly care to discuss, but I give you thumbs up  :D

Could you please write a conclusion so I dont have to read it all?

Well, that certainly makes the new hardware much more plausible. I hadn't thought of it this way, though I see slight conflicts with the rumors, as they said the controller screen was in HD.

If Microsoft and Sony choose to focus on input rather than power in the next generation, then Nintendo are certainly playing it smart right now. But with both Epic and Crytek courting for more powerful hardware, I think we may see a notable gap in performance still. Nothing compared to this gen, but still greater than PS2 -> Xbox for example.

I'm still wondering if Nintendo are leaving casuals behind a bit with this tech, as I imagined this controller being more of a Wiimote inspired device.

E3 will certainly be exciting.

Also, I just won a great giftcard for a gameshop! My day is awesome!

Well, since you're hoping for solid responses, here goes, though it will be a long response:

-"Wii’s unmatched explosiveness by focusing on a new way to play" -->  Nintendo focused on a SIMPLER way to play, and so EASIER, not just NEW way to play.

-" with a far inferior base technology (in raw crunching terms), demonstrated you do not need to be cutting-edge to be successful and an industry leader"  -->  The wii was cutting edge, just not along the traditionnal path of CPU/GPU/etc.. that we've always seen. Putting those acceloremetres at that size really increased the price of the controllers, 50 or 55£ for a "full" controller, instead of just 20-30£? possibly before.

-"Nintendo simply gave 3rd parties no reason to spend the costs to produce a lower quality product. 3rd parties knew they had just as much probability to make the same profits on the PS360/PC version of a game as an exclusive Wii version." --> You seem to assume that better technology means better games. That's just wrong. Also, the Wii sold to people with a very different mindset to how a game should be. Even if it was as powerfull as PS360, the wii version of a direct port would probably sell MUCH less than it's counterparts.

-"The standard controller will move back to the more standard controller. It will adopt the classic controller pro overall form factor; very similar to the dual shock Sony controller." --> Really, the shape doesn't matter too much, as long as it doesn't have too many buttons.

-"Finally, Nintendo gains an ability that was lacking in the Wii/DS era; true compatibility between the devices." --> This really is unimportant, there was only ever 2 games on the Gamecube which did this, and they weren't that popular, so why bother?

-"They will strive for something that exceeds PS360, yet will be priced $350-400 with a small profit" --> Why price it so high? That doesn't make sense at all, the price shouldn't exceed 300$ and still, 250$ should be a maximum.

-The whole idea of Nintendo teaming upo with Google to run Android apps on their home console is really far fetched: why would I use PHONE apps on a HOME CONSOLE? It seems like a useless thing to do.

To finish off, it seems that you want Nintendo's next console to be more like the PS3/360. Fair enough, if you want it, that's fine, but from a business side, that would be terrible: high prices, dumbed down PC games, a focus on non gaming things on a games console, and direct competition with Sony and Microsoft, they would lose badly, I mean, just look at what happened with the Gamecube. The best thing they can do is follow the Blue ocean AND Disruption startegies that gave them success with the DS and especially the Wii.

The most interesting mock-up of the 'project Cafe' controller I've seen is one where It's a wiimote, with a six inch touch screen down it's length, that clips into a Classic Controller Pro shell.  

That to me seems like the most reasonable and probably.   As it's still a Wiimote (with touch screen) the casuals will identify with it and love it's simplicity still, while 'core' gamers will clip it into it's shell and play traditional games, in the traditional style.   Since all users will have a CCP now, 3rd parties can easily port all games onto Cafe, greatly increasing it's librarys over Wii's.   

Meanwhile Nintendo can continue with it's Wii___ series of games which just make use of the wiimote/touch screen aspects.

Re: The OP.   Overall sounds assumptions.  As I wrote elsewhere, I don't think Cafe is going to start a new arms race.  Sony/MS do not need to launch new systems to compete with a system that's playing the exact same games.   Sony's 1st/2nd party exclusives and move are sufficient to keep it competitive (especially if it's cheaper than Cafe!).   MS will need to moneyhat some exclusives or really do some exciting stuff with Kinect or it will have a hard time competing with two comparable systems both which have far more popular exclusives.

Superchunk, I hope you're right on those specs, especially wireless N (plus the unmentioned minimum of Dolby Digital 5.1)

I still can't wrap my head around how they will make a Wii-compatible controller and go back to a more traditional controller. Unless, of course, they just make the current Wii controller useable with the new system.

Looking at the 3DS it is fairly clear that augmented reality is on Nintendo's mind, and one of the biggest things missing from most of the rumours is any indication of Nintendo bluring the line between digital and physical space. In fact, for years it has been clear that Nintendo wants to expand videogames into the physical world more and more; after all, that is (effectively) what Wii Party is.

It would seem to me that, while we should look for improvements in the Wiimote or controller in general, the advancement Nintendo will be pushing is probably more conceptually complicated than a widget on a controller. Certainly, it might involve widgets on controllers (like cameras on controllers or even something like an LCD screen) but it is much more likely that these are just components of the larger concept. To understand what I mean consider the motion controller in the 3DS, on its own it is only a widget but it is an essential component to producing the AR games in the 3DS.

On price, I expect $349

Why? Well the following reasons:

1. Nintendo are going after the hardcore market (Iwata said so referring to the 3DS and the next console will reflect that shift too), it'll need a significant performance boost and I imagine a price of $349 will be needed to achieve that boost, pay for the new controller and cords, cables, boxing and shipping while still maintaining profitability.

2. Economics will show that the Wii should have launched at a higher price than what it did launch at. Why? Because demand so so much higher than supply. At $299, Wii would have sold more slowly at launch and also would have been selling better today. At $349 (a price that people are very happy to pay for a console) the system would not sell out instantly and everybody that wanted one at $349 would be able to buy one.

3. Value positioning is important here too, Nintendo will want to price the console at a premium compared to the competition. The XBOX 360 and PS3 could both be down to $199 by the end of 2012 and an extra $150 tells consumers that this system is much more advanced than those while still being relatively inexpensive when it's true competitors roll around.

4. Third parties are goint to want to be able to port all their games across all next generation systems without too much difficulty. Nintendo wants this too and this price point allows that. At $349, Nintendo could spend $200 - 250 (depending on the cost of this new controller) and be relatively confident that its system would be on par with Sony's and Microsoft's. The reason is Moore's law, that every two years, hardware power doubles and also the same hardware halves in price every two years. It means that a late 2012 launch from Nintendo with hardware costing them between $200 and $250 would cost $100 - $125 for Microsoft and Sony in late 2013 and assuming they have budgets between $400 and $500 for the hardware alone, the systems would only be around 4 times as powerful as Nintendo's system. 

That would mean (roughly) Nintendo's system would be like a PS2 to Microsoft and Sony's Wii. It wouldn't be a huge gap and multiplatform development would be possible.