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Soundwave said:

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. 

I think you're ignoring certian realities into the equation.

360Arcade is $199 (at a profit).

WiiU will have larger cache, 3x the memory, far newer CPU, far newer GPU, tablet-esque controller, wiimote, nunchuk, and a bunch of software/a game. That easily pushes the price up $100 in order to keep a profit.

Also the console is a little misleading.... its quite long from what I've read and larger than Wii in other areas as well.