Being that the Wii was highly successful with "outdated" graphics against two much more powerful systems, and most of the "hardcore" gamers constantly proclaim that the HD consoles are good enough for them, there is certainly some truth to a statement that processing power and improved graphics will not attract gamers to adopt to a new generation of systems like it once did.
With that said, this plays to the strength in the strategy that Nintendo has been executing for the past 7 years. The primary focus of the Wii U is on creating game-play experiences that have not been possible before, not on raw processing power; and if Sony or Microsoft try to convince gamers to pay a premium price to have better graphics while not offering a compelling improvement to game-play they may find themselves in trouble.
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