Eh, even with microconsole components they could make something considerably more powerful than a Wii U, like I said two Apple A8 processors in a small box would likely outpace a Wii U fairly easily even today at about 10 watts power consumption or so.
Bump the RAM to 4GB too, you got a decent upgrade. Wii U games already look pretty nice, something that could run the same games at 1080p with even better image quality and say better lighting and textures wouldn't be bad at all really.
I think it's honestly either this approach (low cost, low risk mini-console) or going the megaconsole approach.
You can't go the middle route though, that will absolutely get you killed. I know some Nintendo fans think that a PS4-ish (maybe slightly better) Nintendo console for say fall 2017 or 2018 would work out well, but it's a crazy thought honestly.
PS4 and X1 will be approaching a combined userbase of 80-100 million by then with hundreds of games. Nintendo couldn't even keep up with a PS2 that had a 1 year/20 million headstart, there's no way Nintendo would even be competitive. Too little, too late.
It's either the micro/budget console approach that is reasonably powerful by its own merits (just not in a pissing match versus Sony/MS) and cheap or a megaconsole approach, where they would have to release something more along the lines of a Playstation 5, and ideally have a 2 year headstart (1 year headstarts as we've seen don't do a whole lot for Nintendo). This would be an expensive and riskier proposition for Nintendo with higher development costs.
The middle route of a "hey guys, it's our PS4, 3-4 years late!" won't work.
Unless they are sitting on another Wii-like controller miracle, which I doubt, those are basically the avenues left to them, my guess is they will take the microconsole/miniconsole approach. Even if it sells only about 20 million it would likely be nicely profitable for Nintendo.
They can throw in some gimmick controller from Miyamoto, just not one that's expensive to produce, but it can be suitably weird to be "innovative". Hopefully it means we actually get an F-Zero game next time around since it sounds like he won't allow one to be made unless there's some new control gimmick to go with it (I really hope Star Fox U is not done in by a lot of force fed "we gotta showcase the controller!" design thought).







