If I put it like this: if Nintendo's 1st party games couldn't sell the GC or N64, then there's no way in Hell MS's and Sony's 1st party games will be able to move their new systems. MicroSony are depending on 3rd party games - THAT'S what sell their systems. So, if Nintendo can rely on its 1st titles, then neither can MicroSony. As simple as that.

And how do they do that? What does "better consoles" mean in this context?

But what can the PS720 do to cripple the WiiU then?

And what's the reasoning behind this? How do you know?

Bribing them?

I'd argue they got just as powerful features up their sleaves:

There's 6 great things going for WiiU IMO:
1) Miiverse (facebook of gaming - c'mon that's a GREAT idea!! And MicroSony won't have enough time to counter it until they launch PS720)
2) Backwards compatibility; all Wii accessories will work on WiiU, which means you'll have those intuitive and easy to use Wiimotes casuals love to use, and are comfortable with to use.
3) NintendoTVii; it's great. Simply great. I want it here in EU as well!!! Hopefully they'll find a way to give it to us over here as well.

4) 3rd party support. From what I can tell (I'm no techie by any means, so I rely on others when they talk about CPU's and GPu's and what not) PS720 won't be graphically superior to WiiU in the same way as PS360 is to Wii. That means good (or at least decent) ports on WiiU, and not the gimped versions Wii got.

5) The controller.
6) 1st party games. Nuff said.

For this holiday season there's virtually nothing Sony or Microsoft can do except aggressively cut the price of their existing consoles to take more of the budget market. The price of WiiU for a new console is quite competitive, even against the current gen.

When 2013 comes about they'll need to market the hell out of the new consoles and have some incredible launch exclusives to boot. If they're significantly more powerful then they may be able to convince 3rd-parties to leave WiiU with last gen tech (like they managed with Wii) but I doubt that will happen. Most game engines will be scalable and will likely just run slightly scaled down versions for WiiU. For Sony, they really need to push Gaikai and for MS they need to push whatever streaming solution they have. Streaming and online distribution are likely to grow and they need to position themselves for when it takes off.

Finally, I actually think Sony will be able to release a decent powered system for fairly cheap. They're releasing at least a year later, are unlikely to have a second screen to take away system resources and that tablet controller likely takes up a big chunk of the system cost.

Everyone wanted the wii because of it's motion control gaming, something that was new that nobody had seen before.

A tablet control and some good features won't give the same impact.

But they're not dropping the motion controlls; they'll still be there. And as far as I'm concerned, the Upad is actually a great addition to core games; no need to paus the game to look at your inventory. Awesome.

1. Keep on playing "keep away" with multiplatform games.
2. Have a significant increase in power over the Wii U.
3. Launch at $399 or less.
4. Have system sellers like Gran Turismo 6 and Halo 5 available in the launch window.
5. Have new exclusive IPs available in the launch window.
6. Steal Nintendo's casual market when their guard is down (specifically Microsoft with Kinect).
7. Make the PS3 and Xbox 360 more appealing than ever in the 1 or 2 years where the Wii U will get a head start.
8. Advertise, advertise, ADVERTISE!
9. Multimedia capabilities including apps and a built in Blu-Ray player.
10.At least one of them must have a "hook", like the Wii's remote and the Wii U's tablet.