That is a terrible idea. Wii U is powerful enough for decent visuals. With each console gen the leap in graphics will be less apparent, and it is questionable would it be the worth of increase in dev cost.
Nintendo should have a different approach - buy a boatload of new and fresh IP's and quality dev studios. Make their home and portable consoles the uber exclusive platform. Plus, gain indies support, which they are doing ATM. When they get to the point that they have a steady stream of various first party AAA titles with the 2 months periods, with lower profile titles filling the gap between, they will increase their chances of success.
So, basically, cut the 3rd party "support" alltogether and only depend on first party offerings. Wii U is the best example what N gets when lets their console to 3rd parties without strong first party opposition.
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