Being first is a moderate advantage, and by producing a more powerful system Nintendo could have played "defense" and eliminated a few potential advantages their competition may have; but (ultimately) people buy a system because it offers new and exciting game experiences they can't get elsewhere and I think the draw of better graphics is getting smaller and smaller all the time.
With that said, with how highly optimized late generation games for the HD consoles are running at (roughly) 720p@30fps and their quick early generation unoptimized ports are running at (roughly) 720p@60fps on the Wii U I think it is fair to say that the Wii U is at least twice as powerful as the HD consoles; and may be 3 to 4 times as powerful as either of them. With this in mind, I'm of the opinion that developers of games in the next generation will have to choose whether to target the largest user base possible (resulting in games targeting the Wii U with some frame-rate and resolution enhancements to more powerful systems) or whether to produce the most advanced graphics possible (resulting in games that run below 1080p@60fps on the most powerful consoles); and I expect that most games that are not big budget blockbusters will probably choose to target the largest user base possible, and this would mean that there is limited benefit of the Wii U being substantially more powerful.
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