I think it's true.

They released some detailed specs around last E3 too.

"Based on Power7" is a term that can be wildly stretched in a lot of ways.

If it was a legit Power7, it would blow the PS3/360 out of the water (and probably melt that case), but devs have already come out and said the CPU isn't all that great. The GPU is supposedly decent.

Honestly, buy Nintendo systems for Nintendo's games. Any decent third party stuff is a bonus and you'll be happy. This was never going to compete with PS4/720 on power, Nintendo got out of that race when the Wii brand as a whole was introduced.

IMO Nintendo designed something that got to just above XBox 360 in horsepower and that could fit into a very compact case. That's their priority. Along with something that could be sold for cheap. Their priority is not people who need to DX11 effects/Unreal 4 engine graphics. What Nintendo IP even needs that kind of power? Nintendo is not greenlighting a 100 million dollar Metroid game fellas. For third parties ... well that's going to be their issue if they want to port games or not. 

Espresso for Project Cafe..how fitting.

I said...wow. 

If this turns out to be true... Is it even worth getting the WiiU then?!

We know that the Wii/Gamecube is based off of a PowerPC 7xx series processor, which had at most 2 cores, ran at a peak of 2.5 GHz, and IBM (essentially) ended all R&D on several years ago ...

There is 0% chance of this rumour being true.

As for the energy consumption, IBM has bragged that the Power7 architecture was 3 to 4 times as powerful as the Power6 architecture while using 1/4 to 1/3 as much energy. I don't think it is much of a stretch to think that one of these processors at (close to) the low end for number of cores and running at (close to) the low end for clock speed for the Power7 series would be able to fit into something as small as the Wii U.

Nintendo is a client, IBM may have stopped active R&D on this years ago, but if its something Nintendo requested, I'm sure it's something IBM would look into it. It's not as if they took all their documentation for Broadway and burnt it. 

We also need to remember the PS3/360 have big problems emulating/running PS2/XBox content. Basing the CPU on Broadway likely helps Nintendo keep full compatibility with the original Wii.

It also falls in line with some devs/speculation commenting on the CPU not being so great ... if we're talking a legit Power7, it would rip the PS3/360 apart, but not one developer has said that even if some have been complimnetary towards the amount of RAM (double the PS3/360 apparently) and the GPU.

This is the part that makes me think there is a grain of truth to this rumor.

Why would Nintendo fork out hundreds of millions of dollars on R&D to die shrink a 14 year old processor to a 45nm process rather than spend the same amount of money licensing and modifying a higher performance (per watt and dollar) CPU that already has the vast majority of instructions necessary for backwards compatiblility?

Why, after IBM confirmed that it was a Power7 chip, would Nintendo abandon that CPU to move back to the Wii CPU?

You would have to believe that Nintendo was run by morons to believe a rumour like this. The "leak" is likely a joke to demonstrate how stupid "haters" are.

The Wii U likely needs the Wii's GPU to ensure backwards compatibility, but no components beyond that are necessary.

We don't know what Nintendo paid IBM in R&D so that's an assumption at best. People don't realize "R&D cost" in those year end statements also covers *all* R&D, meaning game development costs as well, that's what R&D is filled under, so when they see X amount of dollars for R&D that does not mean they're spending like a billion dollars developing hardware.

Why else would Nintendo do this? Because it's probably damn cheap to do this. We're talking about something that probably needs to be sold at a reasonable profit for as low as $250 with a giant tablet screen in the mix.

If an enhanced Broadway core x3 brings them to about par with the 360 CPU ... it's a direction I could see Nintendo taking.

These same sources also had more detailed specs released around E3 of this year:

http://www.vgleaks.com/world-premiere-wii-u-specs/

This leak is essentially like saying that the PS4 will use a processor that is made up of a hybrid processor made up of a core i7, 4 Cell processors each with 8 SPEs ... Taking the idea of an overly complicated, expensive and difficult to develop for processor to the extreme.