Will the next-gen Wii be more powerful than the PS3?

[Gojimaster]

This thread is all purely speculative.  I predict that the new Wii will come out before Christmas of 2011.  The Wii actually has a pretty good line-up for 2010 and Natal and Arc don't come out till late 2010.  I think Wii will keep up its momentum through 2010.  I think the Wii will begin to drop in 2011, especially with more competition for the casual market.  The Wii should have a few great titles in 2011, but it will be the beginning of the end. If the Wii makes to Fall of 2011, it will have had a 5-year cycle which is standard for Nintendo consoles.

The next question is this:  How will Nintendo compete into the next-gen?  All we know so far is that the next Nintendo console will not be merely an upgrade to HD.  Nintendo has always brought fresh new gaming concepts to all of their consoles (except perhaps the GameCube).  In addition to better graphics, Nintendo will bring some new advances to their motion controller schematics-- although Natal is definitely stealing some of the thunder.   But how powered will the next Nintedno gaming console be? 

The next Nintendo console needs to have at least HD graphics, that much is obvious.  It will also need a much bigger hard-drive and a much expanded internet interface.  Nintendo can not play it too safe with this next-gen.  Microsoft will probably also be releasing their new system at around the same-time.  Nintendo is going to need to create a system that is far more powerful than the current Xbox 360 if they want to even have the slightest chance at recapturing their hardcore gamer audience.  If Nintendo goes into the next-gen audience underpowered, then it will be a repeat of this current game generation where Nintendo loses all the 3rd party support for AAA titles.

One thing is for sure-- Nintendo will have much more competition for the casual market, so they will need to provide incentives for 3rd party developers to bring the big games back. 

PS3 is somewhat of an x-factor in this equation.  PS3 claims that they want to have a 10-year lifecycle.  If Nintendo releases in 2011, then the PS3 will be 5 years through their lifecycle as well.  Prices should have dropped enough by then for Nintendo to be able to manufacture something that is at least as strong as the PS3.  Plus, I doubt the new Nintendo will use Blue-ray-- which will also reduce the pricetag.  The current Wii doesn't even have a DVD player, so I think Nintendo will do just fine if they focus as a gaming/casual machine rather than as an all-around entertainment hub like the PS3 is trying to be.   I think Nintendo is going to need to make something stronger than the PS3 so that they can still have a solid gaming system compared to the next-gen Playstations and Microsofts.

Nintendo has the cash to bring about this change, but will they actually do it?  Thoughts?