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In my opinion this is exactly the WRONG move to make at this time and smacks of desperation.

You do not successfully compete with mobile/Android based home game systems by being their poorer cousin.

You compete by offering compelling gameplay they simply cannot (such as Zelda or motion controls).

Yes, this will give existing owners more games to play - but the more time they are playing $.99/free apps the less time they are playing $60 console games.

And this is no incentive for anyone to get a WiiU. Aside from WiiU console games (which apparently aren't enough to get someone to buy a WiiU now) you can now choose between buying a $99 Ouya, $79 Gamestick, a Dual analog controller for your Galaxy S4 (or rumoured iphone 5S) to play games off your TV (or phone), or a $349 WiiU. Or a tablet which plays 100% of the games and does soooo much more. How does WiiU come out on top here?