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I actually don't even think this is a budget issue.

This is casual-catering getting in the way. Nintendo is obsessed with released tiny consoles even though there's no practical purpose for it unless the console is meant to be a hybrid portable device.

But their "marketing research" has told them soccer moms prefer small, unassuming looking consoles, so we're all hooped by this need.

Even at $299.99 with a touchscreen pad, there should still be a decent enough budget there to smoke the PS3/360 outright, this shouldn't even be a question.

But when you force an arbitrary need into the equation, like the console casing having to be a fixed size, you have to start doing things like gimping the CPU to meet a certain heat output, because otherwise your case will just melt. I wouldn't be surprised at all if the Wii U has overheating issues even as is.

It's all because of that silly (IMO) desire to have such a small console. I had an NES growing up, never had a problem with a console that size, even the SNES is larger than the Wii U I believe.