My personal take on this. If U was selling like hotcakes would he have said this?
I mean the engine is "very scalable" after all.

The fact is the console is getting knocked on the two issues that matter most.

Sales and hardware. There is hope for sales, maybe if sales increase dramatically the hardware won't look so bad.

Sad to say but after all the hopes and expectations (mine included) it seems the U is going the same place as the wii with 3rd party support.

Except for when games do sell like Epic Mickey 1 or Goldeneye or Resident Evil 4.

I will keep buying Nintendo consoles for their exclusive like I always have. Considering I own multiple consoles not having a multiplat doesn't effect me at all. Besides if you enjoy Nintendo exclusive more than 3rd party multiplats you would still need the Wii U.

Does it suck that Nintendo isn't going to get multiplats? Yes
Does it effect me or anyone who loves Nintendo games? Nope (unless Nintendo goes under, which will never happen)

Wii U not a next-gen cosole confirmed?

"Hahaha no." Rein said, with expert comedic timing. The room erupted with laughter. As the laughs died down, Rein continued: "I mean, sorry, it's not really a correct answer. We're not… we have Unreal Engine 3 for the Wii U. Right? And Unreal Engine 3 is powering all kinds of amazing games, still lots of games are being made with Unreal Engine 3. We announced today about a new Unreal Engine 3 license. Unreal Engine 3 doesn't disappear because of Unreal Engine 4. But our goal for Unreal Engine 4 console-wise is next-gen consoles. That's really what our energies are focused on. If you want to make a Wii U game, we have Unreal Engine 3, and it's powering some of the best games on the Wii U already."

It does effect you though.

Do you honestly think shareholders will be happy with Gamecube or N64 level sales after the Wii?  Having terrible 3rd party support does hurt the console big time.  People talk about how huge Mario and Zelda are but they werent able to raise Nintendo to high console sales on their own.

Its increasingly looking like Wii U is the next GameCube, not the next Wii

Nintendoomed

nobody ever claimed it would be the next wii.....but you have to consider that the gamecube era wasa time where the ps 2 dominated everything. the big games from nintendo really looked unappealing to many (wind waker, double dash, sunshine) the console design was also unappealing with the color and the box. i hope nintendo brings out the really big guns at e3

But Cliff Bleszinski was fired, remind me again why UE4 is so important/relevant to next gen., especially considering most major companies are designing their own engines?

Epic Mickey was an exclusive, Goldeneye was made by Rare and was an exclusive, and Resident Evil 4 was originally an exclusive but later ported to the ps2.  I guessed you missed the part I bolded, if it's an exclusive then sure, it might sell pretty well, but if it's launched alongside everything else, the nintendo version rarely sells well.

and didn't they say it is working on smart phones and tablets i smell bullshit here