Actually I just noticed my math was totally wrong (I interchanged PPU and SPU die size).

The die size (45nm) of an SPU is 6.47mm^2, of a PPU 11.32mm^2  The rest of the cell chip (115.46mm^2) is the EIB and some other stuff (which comes to around 50mm^2). So a 16PPU/128SPU chip needs 16*11.32 + 128*6.47 mm^2, "only" around 1000mm' 2 for the processors. Of course the EIB is a nightmare now (this is the bus that lets every processing element on the cell talk with very other processing element. With only 9 elements on the cell die, that is doable, but already requires about 40mm '2 of die surface. Now with 144 processing elements, it becomes an absolute engineering nightmare, probably impossible to do at all. So a 16PPU/128SPU supercell chip most likely would be segmented, basically 16 individual cell chips which know almost nothing of each other. Next the EIB would not scale to 16* 40mm^2 but designed to something smaller like 300mm^2 (with reduced capabilities as the consequence). You'd end up in a chip roughly 1000mm^2 (processors) + 300mm^2 (reduced EIB) + (at least) 100mm^2 (rest of the superchip, like "mechnaism for work allocation"), Still that is a >1400mm^2 in 45nm chip or around >800mm^2 in 28nm. Way too expensive to manufacture (we're probably approaching the four digit number now). And again, power requirements would be insane as well.

Even though he may not be talking about a native change in texture resolution, his point is still a good one. With the extra power in the WiiU and the more advanced GPU, developers have a chance to up the texture filtering, improve the anti-aliasing methods and add in effects like soft shadows or particle effects. The resolution is only part of the story.

I was pointing out that there is no need to change assets to run at a diferent native resolution. Your arguement that Wii U games aren't running at higher than 720p due to devs not wanting to recreate assets is moot. And in fact higher quality assets would only make it harder to maintain a playable framerate at higher resolution, just look at the 1080p games on PS360 they all have lower quality assets and effects, not higher. Just look at any HD collection, they all use mostly last gen assets but render at 720p or higher, and I don't think you could say that devs put more effort into something like the Silent Hill collection than Wii U ports of AAA games or even Nintendo's own games.

There is no technical reason to scale native resolution to the quality of the assets rather than the power of the system, not with a modern 3D engine. Now if we were talking framerate then yes how the game is built would restrict the ability to bump games up to 60fps without a lot of work, but resolution should scale  with the fillrate of the hardware.

I don't think you understand what native resolution means.

There is no reasonchange assets to play the game at different resolutions, hence why the PC has so many options. But the game was designed for a single "native resolution" that is based on many things. Current gen is predominatenly less than 720p "native", unless the game was actually made on PC and downported to PS360 like Battlefield 3. Which is why BF3 on PC is drastically different than PS360... on a good PC of course.

You're right that part of that is to keep the framerate at a good level (usually 30fps at least).

Right now, all those 3rd party games are running at 720p60fps and on two screens (lower res but still 60fps) on the Wii U. That is definitely better than their PS360 cousins.(proving its definitely more powerful by a fair amount)

The hope was that native would be bumped up to 1080p as most of us are positive Wii U can do it. However, costs prevailed and 3rd parties simply didn't want to spend the resources to do so. That doesn't mean the console won't upscale the games to 1080p just as PS360 do in many cases. Kinda why back of most PS360 game cases say it can output to 1080p even though the native resolution is far lower. Just depends on TV and HDMI connection.

To change the 'native resolution' the devs would have to alter the art assets and yes that also directly effects the fps.

No I don't think you know what native resolution means, only 2D sprite bassed games are fixed resolution (and even then some aren't) 3D engines can scale the native rendering resolution. Native resolution is the the resolution of the source material, in this case that is the game's internal frambuffer. Native resolution is a veriable that can be freely changed in any modern 3D engine but there will be a performance hit. 

When someone says that a game is native 1080p they just mean that the framebuffer is rendered at a 1080p resolution, rather than rendered at 720p and then scaled to 1080p via enternal scaling or the TV. It has nothing to do with assets, exept that higher resolution assets incur a performance penalty just as an increased resolution does.

The only other definition of Natvie Resolution is when talking about displays, where for example an LCD display has a fixed panel resolution and can only display images at that DPI, which is why without scaling a low resolution input will be displayed windowboxed on an LCD.

It has nothing to do with assets in a polgon bassed game.

Edit: Examples of usage 

http://www.eurogamer.net/articles/digitalfoundry-doom-3-bfg-edition-face-off

"By and large, both Xbox 360 and PlayStation 3 operate at native 720p, with no anti-aliasing applied."

http://forum.beyond3d.com/showthread.php?p=1113342#post1113342

"Games whose back buffers are rendered at strange resolutions must upscale the front buffer (at a cost of extra memory) to either 1280x720 (720p output) or to one of the acceptable 1080p resolutions. (Note: native resolution = back buffer resolution, front buffer = image for displaying/hardware scaling)"

http://www.lensoftruth.com/battlefield-3-is-sub-hd-on-ps3-xbox-360/

"Battlefield 3 on both the PlayStation 3 and Xbox 360 will run at a native resolution of 1280 x 704"

http://www.eurogamer.net/articles/digitalfoundry-tekken6-resolution-game-blog-post

"extending beyond the native resolution of the Xbox 360 game."

Added the rumored 2nd CPU for Wii U that is ARM based and solely for the OS.

Interesting that Wii U's OS has its own exclusive CPU and memory. It better do some crazy ish with all that exclusive resources.

Edited for clarity.

2nd CPU?! What are they planning to do with the OS? Maybe you can browse the internet on the tablet whilst playing a 720p game?!

Link please!

http://wiiudaily.com/wii-u-system-specs/

Its also talked about in neogaf by some devs.

Very intriguing. 512Mb of Flash storage, 1Gb RAM and a multi-core ARM chip for the OS alone. What on Earth do they have up their sleeve?!

idk, but we should be having another Nintendo Direct pretty soon. I figured it would actually be this week, but no news yet. They really need to define what the OS actuall offers... so many questions still.