I think it will not work with Wii. Wii users don't want to spread annihilation and violence. They like funny Mario and friends. When I see on Zelda sale in Japan I'm sure there is no place for complex titles.
BTW have you seen this awful spot of Paper Mario with these silly kids, dumb music and awful graphics... yes, cpu doesn't matter at all for audience like these kids.
I think it's wrong to say we don't like violence, so much as we don't normally get it on nintendo machines. We get a few M rated games but few of them are rated highly on their violence or blood factor.
To have a handful of games such as GTA/Manhunt 2 and things of that nature would be an asset to nintendo -and- the developer. Like it or not there are many people that -cannot- afford 600 or 400 dollars (us) on a system and 60$ per game. If wii can offer an alternative for those that want it but cannot afford the more expensive variety or don't want to spend on it then it's good all around.
It will give the developer resources to develop games for 360 and ps3(those games cost so damn much these days ;;) and Wii. There is a market for M or A/O games on Nintendo just as there would be anywhere else, especially now that they seem to be letting companies do them in more frequency.
As a note.. I hate FPS, survival horror all of that crap.. However I won't pretend that stuff doesn't sell.