I am a Nintendo fan and I will say that graphics are extremely important. Graphics are the first thing you notice when you see a new game. A lot of game designers were artists before they were game designers. They want to make games that represent fully what they have imagined. By limiting the ability of the console to create next generation graphics, you limit the games that certain developers want to make. Also some games don't get ported over to your system. But Nintendo wants to make a profit from day one. Hats off to them, their strategy works. They will have enough money now to fail at creating 2 or 3 more systems. But the hardcore crowd, or those that see themselves as hardcore, love graphics. I also believe graphics are an important part of the immersion process. Each generation has been about outdoing the rest, and in the past it was about graphics. Now of course the big companies will try to implement motion controls but we've always come to expect a bump up in graphics. If consoles had graphics that looked like the NES days then PC's would be getting all the attention.
