Original poster must have read my mind - from another post i just did - Yes totally agree the strategy is quite obvious and pretty much guarrantees their success carries over from the Wii which is really the proving to be the best next gen console.

I should also point out that nintendo has a draw card that neither MS or Sony can ever match - Nintendo can bring out a True HD Wii console by 2010 which will make the PS360 look like relics of the past - i expect a quad core 4Ghz Power PC, 2 gigabyte memory and 8*BD drive & most importantly 100% backward compatability and a WiiMote V2.
MS-Sony can hardly counter Nintendo by terminating their existing consoles which are struggling to make a profit they would have to write off the PS360 as a huge loss (like MS did with the old Xbox) Nintendo own;s this gen and will dominate the next generation of consoles too.

Nintendo will not push the Specs - MS and Sony made that mistake and have to sell HW at a loss for at least another year. But in 2010 nintendo can do a new console with 2Gb memory, Quad core PowerPC and Blu-ray which trumps the 4 years old PS360's and keeps 100 million users on nintendos platforms and will sell at a profit - (just like the PS3 and X360 hope to do eventually).

I have no doubt they will even do single disk multi-platform transitional game titles to help users migrate more easily -the technology is here some new Blu-ray disks are comming out with a DVD & Blu layers allready.

@ stephen700
Since you agree with me your status as a genius - confirmed.

Sorry no one mentioned my little flash movie, wasted an hour or so on that puppy. Damn film critics.

Why is it that many Nintendo fans want a company that sits back on its laurels and waits until it has to react to its competitors? +1 for the OP.

That was really my point. Why do people think they will? They're in the catbird seat, they've got the money, they've got momentum. The only thing I see holding them back is waiting for the economy to improve.

Nintendo is a fierceley competitive company, especially when they're behind but I think they have an open road before them and I'll be a bit surprised and more than a bit disappointed if they don't take it.

I think they will want the Wii 2 to be as unobtrusive as the Wii is. The concept and expense of using a HD drive running at super speeds goes against their design principles, but so do excessive load times. Noise/Heat/Size are things which are completely contrary to the design of the Wii as it currently is. They are a consumer focused company and therefore they will not make such design compromises.

Im picking they will delay their release to 2011-2, rather than trying to push technology too far. Im picking they will release a system with a drive for legacy software, but future releases will come on an ultra quick cartridge. Think ultra simple, pretty quick and cheap to make and they will include a couple of GB of flash for on board storage.

The processor architecture im picking will be >20W, single unified CPU/GPU with 4*2Gb ram chips yielding 1GB of total system ram. Essentially im picking it to be something like AMDs fusion processor, but designed to work within a Laptops constraints.

There might be a redesign with more internal space, better remotes with Wii MotionPlus built in, better interface, slightly more powerful. a sort of Wii 1.5 about 2 to 3 yrs down the road, but I wouldn't expect another full wii for a good while. It is selling too well at the moment to know for sure. The next full Wii will definitely be capable of 720p in theory, but by that time stereoscopic 3D might be pulling in as the next big thing. Also, Digital Downloading might become so popular that we don't have harddisks anymore, who knows. 5 more years is a lot in terms of tech.

@ Squilliam

Well reasoned and thought out. I don't find anything to disagree with except the timing. I really think they may move sooner. Possibly as soon as the economics look better. Two things could push things up possibly.

1. Motion+. I've been reading up on the technology and it will address most of the legitimate complaints about motion control. Just not liking it, well what can you do. In an case, if it works as well as I think it will, you may have a lot more interest from the hard core gamers but they aren't liely to jump ship without the graphics.

2. Game developers. A lot of developers want to do HD but are having trouble making it pay. They're gun shy and understandably so. They would probably like a HD platform with a huge secondary SD installed based as a free bonus.

Granted, it would be a bold step, and if executed well could squeeze Microsoft and Sony badly. But after what we've seen from them in the last few years, I think they may just be bold enough.

@Grampy, it will likely be difficult to release a game using technology from 1998 and 2010 at the same time. Its difficult enough to port between the Wii and Xbox 360 and they use essentially the same architecture, but what if they want to move away from the Power PC line?

They have a simple mouse-like interface and between developers and tools, their likely best bet will be making the system PC developer friendly. It makes perfect sense, considering the controller in many ways is an airmouse and there are a lot of developers familiar with that architecure. Also much of the development of CPU/GPU combinations will be focused on this space, I don't see IBM making much progress in this area.

My honest belief is that either they will buy the Xbox 360 design in entirety as that whole system will be ready to fit inside the form-factor they require (Sounds far-fetched but it does make sense) or use something like Intels X86 CPU come GPU Larrabee. Most likely the latter actually because Intels design goals of conserving offchip (expensive) bandwidth fits into their design principles of having a simple system.

The developers won't have a problem with HD by the time the next Wii is released. The issue with the current consoles is they really pushed the power/heat envelope to far too quickly and forced the developers to play catch-up. There will already be an HD install base of up to 100M consoles by the time the next Wii is released. So long as its easy to port to, it won't have a trouble if it matches or beats the current HD consoles performance.

Im not sure about Motion+, its not released yet. However its not the graphics that let the hardcore players down, its the fact that the Wii cannot produce the game worlds that the HD consoles can. Strip away the graphics down to a wireframe and the Wii couldn't run most HD games as they are currently designed.

I still tend to think that Nintendo is either going to very much surprise us (I would not hazard a guess) or that they may go the Apple route and treat the Wii as a brand rather than a console, so the next console will also be the Wii, just like the different iPod iterations.

@ Squilliam,
Point taken and conceded, I know enough about that sort of thing to appreciate the difficulties.

But watch motion+, it'll be a whole new world.