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I think Nintendo pretty much hit the sweet spot with cost/performance in the Wii U - a less powerful console would not be much cheaper, and a slightly more powerful console would be much more expensive.

But I also agree with some of the comments here that the gamepad added an unnecessary (and unwanted) cost. I think Ninty should have stuck with the Wiimote as their default interface - it worked well for the casuals, and hardcore gamers would happily buy a classic controller add-on (or used the one from their Wii).