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There is no Power architecture successor at the performance, cost and power levels required to make it the main CPU for a new Nintendo console. Including it as a second chip would be very expensive as die shrinks are a lot slower than previous generations. And at the power envelope Nintendo is targeting, emulation is unlikely.

So, They'll drop the backwards compatibility. It didn't help Wii U, and Wii U owners will buy the successor regardless of backwards compatibility. I think it's the right decision to drop it.

I expect Nintendo to use AMD ARM, not AMD x86.