The home console has to be at least as powerful as the PS4, otherwise no third party support. I think PS4 and XBox One will still be supported for a few years, but we don't know if the PS4 Neo userbase might eventually grow big enough for all the developers to abandon the current generation.
I don't think it will be anywhere near as powerful as the PS4Neo, though, except if Nintendo does the trick with cloud computing (they have a patent, remember). Nintendo will not try to win the console war with mere power, they want to be innovative and I think they want to make an affordable device.