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I'd rather a more powerful system, but if it was a pre-determined fact that nothing Nintendo does could result in any kind of change with 3rd parties, i think a lower-spec machine would be a wiser choice for them. They wouldn't be attracting many core gamers who weren't already Nintendo fans anyway, so they might as well capitalize on those to whom price is more relevant than most other things (e.g. parents on birthdays/christmas).