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The GBC and DSi both have boosted graphical capabilities, yet neither is typically seen as a new generation.  Both have exclusive, content, too.

With handhelds this might be an easier commitment as the price is usually less, but for a Wii HD you can bet it would be out of many people's price range.

About as interesting as adding color, or perhaps some cameras.  Some people will jump on board, others won't see a need to.  Also, a very large portion of Wii owners skipped the other two systems because the Wii was the only one targeted to them.  This is like arguing that no one would buy a DSi because they didn't buy PSPs.

With a high price and little value, most people will not jump on board. Nintendo would be seeking out an audience that either was not initially excited by HD visuals or already has it with the competition. The Wii snatched it's current audience because it was a new experience, HD would not be a new experience at all.

Nintendo doesn't, and shouldn't care about fans of their competitors. They have always focused on their own business, and that's why they made more money at their least successful point than Sony has at their most successful point.

Agreed. This is a very reason why they shouldn't and won't create a Wii HD which would simply be matching their competitors and entering a red ocean. Instead, they will create something new that distances them from their competitors.

Same with DSi and Gameboy Color.  Or Wii Fit or Wii Motion Plus.  The idea isn't to sell hardware for software's sake but to sell hardware for hardware's sake.  Nintedo makes a lot of money doing that and whether peopel wnat to admit it or not that's actually a good thing for the future of gaming.

Software drives hardware. Nobody buys a Wii because they want a white box sitting in their house doing nothing. They buy it so they can play great games. The reason why I mention 3rd parties is because many people believe that a Wii HD would allow them to include the Wii when they make multi-platform games. It's not true as 3rd parties have abandoned Nintendo long before the Wii, and releasing a Wii HD would not make any difference.

Actually, you've gotten me wrong.  You see, it's not about releasing a new system at all. It's about releasing an updated Wii that has just enough benefits to entice people to make a small upgrade or to get a few extra dollars out of new adopter because there's not much reason in not buying the superior version.  Again, think DSi, GBA SP, or GBC.  It could litterally be nothing more than a Wii with a built-in upscaler and it'd be enough to extend lifetime Wii sales by a couple of years.

Again, if it's just an "HD upscaler", it would fail. Nobody wants to re-buy their Wii unless there is a significant reason to do so. HD is not a good enough reason on it's own (as it has already existed for 4 years). And, again, minor improvements like that on a home console is not going to create significant sales gains.

Unfortunately that's not quite true.  Sales are already dipping, and while Nintendo has a couple years left in the system's life they could be reaching new highs instead of giving upso much ground to the competition.  You have to also understand, that if Hardware sales decline too much there is little reason to continue supportign it from Nintendo's stance, and typically declines in hardware sales are merely precursors to declines in software sales (which Nintendo is seeing).  With added focus being needed for 3DS and 3rd party support never fully earned, a situation that could have potentially been averted if a relaunch w/ WM was properly supported, it's very unlikely that sales won't continue to decline from here on out.

Sales have dipped but that doesn't mean the Wii is on the verge of exiting the market. Even at it's lowest point this year it's still selling more than PS3 (which had a redesign, something like 3 price cuts, tons of exclusive games for the first half of the year, etc, etc). 

The Wii is not on the brink of disaster and even if it was, there is no way a "Wii HD" would have any kind of lasting effect. The only viable option is to release new, expansionary software. Again, software drives hardware. People buy white, boring boxes so they can use them to play fun, interesting games. The Balance Board sold because of Wii Fit. Gameboy Color sold because of Pokemon. MotionPlus sold because of Wii Sports Resort. DSi sold because of DSiWare and the Camera software.

As Reggie said at E3 this year, "Technology is a tool". All these advanced technologies are there to make our games fun and entertaining. If they don't serve that purpose, then it doesn't matter how advanced the technology is, it will not excite anyone and will likely fail at market.