No. The main problem is lack of power compared to next-gen consoles. If you think PS3/360 can produce beautiful visuals just think about how good games will look once devs start optimizing their games and maxing out these console to squeeze every drop.
Lack of a Naughty Dog-like studio is a problem but those type of games don't sell on Nintendo consoles. Nintendo doesn't seem interested in trying to move in on that market anyway so is it really considered a problem? This seems to be intentional. Nintendo doesn't focus on graphics or realistic games. They focus on quirky, family friendly games that anyone can enjoy. Nintendo values art style over realism. I don't see why they can't have both.







