>>Do you think they should continue with this trend forever?
N has already abandoned this strategy ever since Iwata became the president. Wii2 won't be just another Wii with faster GPU/CPU. It's going to be radically different.
>>Do you think the continuation of focus on faster, more powerful consoles is good for the industry?
Cutting-edge game designs sometimes call for faster CPU/GPU. In this sense, it's good for developers and gamers who want new experience as well as for manufacturers who want to sell new hardware.
But at the same time, an excessive focus on visuals during game development often discourages innovations in game design. Because the production of high-quality graphics inflates production costs, it's been making game development risky business. Since companies want to minimize the probability of losing the gamble, they tend to rely more on sequels and conventional gameplay rather than trying out new things. There aren't many developers who can reliably achieve both innovative gameplay and stunning graphics at the same time.
On the player side, as far as core gamers in Japan go, a lot of them don't seem care all that much about realistic visuals. Some are quite tired of it like "oh yeah? 3D stunning beautiful awesome cinematic blah blah STFU. We don't play graphics". They'd rather have developers put their resources into inventing new gameplay, and indeed Nintendo heard them well.
No, it's not going to stop 'Til you wise up
No, it's not going to stop So just ... give up
- Aimee Mann