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The problem is will anyone actually buy any of these games?

Seems to me like the audience for these games is all on Playstation and XBox platforms, so you're going to end up with a situation where third parties are being asked to waste resources making ports on a platform where their games simply don't sell.

The problem is Nintendo has allowed Sony and MS to basically have free reign on that market for too long that people have settled in with either the Playstation or XBox brand and Nintendo now coming in and saying "well buy these games on our system instead" kind of reeks of too little too late.

And the Wii didn't address that either, for all it's early success, it was just catering to casuals, leaving Sony/MS to have open season on the audience that would actually buy games like GTA, Mass Effect, Madden, and all the other major third party IP.