I take it you haven't been paying a whloe lot of attention to gaming laptops in rencent years?

Over time parts become much more energy efficient at smaller sizes. Look at the size of the N64 then look at the size of the DSi Lite. There isn't really much to it beside working out the tech.

You can make a system taht is 5 times the strength of the PS3/360 that is is 1/4 its size.

Nintendo's main focus is price.

I have been paying attention to gaming laptops, as I have one. They are harvested, underclocked and undervolted chips, only that. They are more efficient than desktop chips as power consumption increases quadratically with the voltage, and you can approximate it to a lineal increase with the speed. Laptop parts aren't different than desktop parts, at all, unless you are talking of the underpowered Intel Atom and things like that.

Since you understand that, you should also understand that a game console is not  a desktop...

XBox360 and PS3 aren't desktops, too.

Nope, but they are also 5-7 year old tech.

Done with 45 nm tech. Chips done with the same fabrication technology, with the same power envelope, can't be several times faster than other chips unless there is a big design flaw. We supposedly have here a WiiU console with a smaller power envelope than X360 and PS3, but several times faster... I'm sure that MS and Sony Engineers aren't retarded.

The components that make up a gaming console are generally custom built with the first real exception to that being the XBox, then the 360 and PS3. They pretty much "are" desktops only with a different aesthetic design. Their chips were more or less straight replicas of existing chips.

Nintendo has always used completely custom built chips made specifically for their machines. This is no exception. People often talk of what the Wii U is based on internally giving references to things like the Power7 and 4850 but those are only bases.

The CPU and GPU in the Wii U are built to fit its specifications. Size is not a problem, nor is power.

The slim 360 is scaled down a decent amount from the original model... and doesn't suffer from the overheating problem to boot.

Nobody is expecting high-end PC tower capabilities from WiiU, but look at the performance from tablets or the Vita relative to their size.

Also consider that the WiiU casing is certainly not as small as the 2006 Wii (who's tech could be easily be made at a handheld size today).

ummm...Microsoft and Sony don't make their chips. Nvidia and AMD do. I'm not sure who makes the Cell now though.

Making major changes to the chip architecture would affect system compatibility to some small degree. Its not so simple.

I must have missed the leak or confirmation that the WiiU's CPU and GPU are 45 nm dies.