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I don't think hardware power matters much to the mass market and Nintendo is smart enough to know that.

We have a console with basically 2001 technology on the cusp of selling 100 million consoles. It is obvious the mass market cares more about games, affordability and user interface.

Nintendo would be smart not to make a super powerful system but instead keep the cost low and throw in the tablet hook.

Some argue that Nintendo will miss out on a lot of 3rd party games again when PS4/720 come out. I dont think this will be the case because

1) Nintendo is much more active getting 3rd parties on board. They already have (timed?)exclusives such as DQ X, ZombieU, P-1000, Lego City Stories, Scribblenauts, Rayman on their platforms. And they are getting many multiplats as well.

2) The power difference wont be as big as it was with the Wii to 360/PS3. It would be much easier to down port to the Wii U

3) I dont think many companies can afford to make such big budget games and not port it to the Wii U. If so many companies went under this generation because of developmeny cost how much worse will it get with PS4/720? 3rd parties would be really stupid to miss the Wii U boat as they did with the Wii.

I think Nintendo is in the healthiest position because they will have at least a 1 year headstart building an install base, has a nice Wii U pad and asymmetric gameplay hook (but Sony and Microsoft may copy), will still use Wiimotes, fully backwards compatible, likely to be the most affordable, and likely to have most of the multiplats PS4/720 will have. Let us not forget Nintendos stellar 1st party games.

What new are PS4 and 720 going to bring to the table? I dont think just more powerful hardware is going to cut it. We have reached the point where the mass market wont see much difference.