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The Zelda U world will be quite limited because the hardware its running on isn't very powerful. There won't be much with regards a physics engine or a large assortment of animals, characters appearing at the same time. It's not really capable of matching the 360 or PS3 for a living environment but can beat them for visual quality.

I think the gameplay mechanics will probably be very similar to past games and not updated. The main change will be a open world game and massively improved graphics.