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WereKitten said:

It is both: the Wii GPU can't output HD because of a strategic decision by Nintendo.

The lie in the declaration lies in saying that the reason to not have an HD capable console was to keep development costs down. That is, they had to make a choice: either improved visuals with higher development costs or current costs with SD-only output.

The emulator proves that current Wii games - though having a lower budget - stil look much better in HD. Thus the previous dicothomy is a lie.

Nintendo's strategic decision was to make higher margins per console by using a cheaper GPU. This worked great for them in the business sense, as they are making heaps of money. Still, Reggie's declaration was the PR spin of a falsehood.

Anyway, this was just to clarify my first post, let's not get sidetracked.

You're missing the point. Yes, everything looks "better" in higher resolutions (well, sharper, though it also makes for a jagged appearence on large monitors without anti-aliasing), but enabling HD development would essentially jack up development costs as developers struggle to implement the feature - by removing HD development, Nintendo very deliberately forced a smaller budget for most games. Again, it doesn't matter what games would look like in HD - what matter is that developers don't spend money trying to take full advantage of it.

Also, I have no doubt Nintendo profited from the lower production costs, but (at best, from your perspective) that only makes Reggie's statement a half-truth, not a falsehood.