a looooooooooooooooooooooooooooooooooooooong but detailed read. I'll post some of the first few paragraphs here

"It's safe to say that last year's Wii U E3 debut left us with more questions than we had answers. It was clear that Nintendo has once again stepped back from the technological arms race that had cost its competitors billions in losses, and was focusing on controller-driven concept games that it felt had a greater chance of mainstream success. However, at the same time, the console was being released seven years after the debut of Xbox 360, so surely it had to reflect the generational leaps in technology we've seen since then? The demos suggested otherwise and, one year later, the evidence suggests that not a great deal has changed.

Of course, as we've demonstrated, tech specs don't really matter so much to Nintendo - a sentiment it is quite happy to put on the record. Its world-class development teams have the uncanny ability to create games that look as good as they play even on less accomplished kit, and the opportunities afforded by any modern processing hardware are immense.

Traditionally, the success of Nintendo's consoles has been entirely proportional to the quality of its own games and even its less successful systems like GameCube have turned a profit. By developing to the strengths of its own hardware, the company's dev teams have an uncanny ability to defy the technological limits of the host architecture. Combined with its unique take on game design, Nintendo games are quite like any other.

However, the reality is that the picture is very much different for third-party publishers - and it is here that the Wii U appears to remain on shaky ground. E3 2012 demonstrated clearly that the current-gen HD era is coming to a close and, to remain relevant to third parties once Durango and Orbis appear, we really needed to see a significant step beyond what was revealed last year. But Nintendo's E3 showing effectively confirms that there is no unambiguous, generational leap in raw processing power here compared to the current HD consoles, and prior claims that the machine hosts twice the power of the Xbox 360 clearly ring hollow."

lots more video and non video comparisons of the games shown too. 

Here's the link

http://www.eurogamer.net/articles/digitalfoundry-vs-wiiu-e3-2012

Really, how much farther can graphics go? I don't think Sony and Microsoft will want to spend that much money next generation ESPECIALLY if Nintendo's console is attractive price wise. Wii U's titles are still in development, expect them to be at least a little more polished once they actually release.

i wonder if you seriously still think there is no big difference between best ps3 games and unreal engine 4 because everything we have nowadays, even pc games like battlefield 3 on ultra which looks better than any ps3 game, looks like a joke compared to unreal engine 4. sometimes i would love to have eyes like you or other people, i would never have to think about better graphics because i wouldn't see any difference^^  when i see the first second of unreal engine 4 i'm just like "omg what a difference" haha

and please don't say "but beyond has great faces" because it has nothing else which would need power (sure other graphics in the game are good as well) and if you regularly play a game with great lighting on pc and see last of us then, you recognize huge flaws there. maybe not if you see pictures or if you don't play these games by yourself but if you wish to have the feeling of a real world, like a "real new york" or looking real in a fantasy world (which means looking still like fantasy but believable), these things are very important.

i remember when i played ocarina of time when it came out for n64, i saw a wall and thought the wall looks like real, i couldn't believe this wall could look better. if i would see the wall nowadays i believe i couldn't stop to laugh.

Questions like "how far can graphics go" are not to be asked. Graphics really are getting more beautiful. Compare games from 2012 with 2010, 2010 vs 2008 etc. Every 2,3 years there are improvements. Like BF3 over BFBC2. Witcher 2 over Witcher. Uncharted 3 over Uncharted 1. Resistance 3 over Resistance FOM.

The next big thing will be ray tracing, maybe in 10 years or so.

Photorealism and crossing the uncanny valley is the limit, and we are far from it.

A $300 console that breaks even would provide a very significant jump in graphics, $400 would be huge. 

I think the Wii U will be fine. The Last of Us looks hundreds of times better than PS3 launch titles so why would the Wii U be different? Its graphics will continue to evolve and expand long after launch. I expect other next generation systems to heavily out preform it but for the next year or two the Wii U will be the most powerful system. Hopefully in that time it can convert a lot of HD gamers to Nintendo.

If you want photorealism you have it. 

I don't understand why in the world you would want that type of game. It defeats it's purpose. Games aren't supposed to represent real life. They are supposed to let you escape from it. 

How much more do you really need? A possible upgrade to resolution is nice but the graphics themselves are perfectly fine.

I'm with APM on this one.