http://i38.tinypic.com/346mgic.jpg
I don't know if you guys have seen these gta4 pc vs console shots,However its obvious that even 2008 tech running a non optimised engine can out pace todays consoles.
Not to go off topic but seriously, this is Take2's first GTA attempt made to run on multi threaded cpu powered consoles with plenty of ram and gpu power, the screen shot comparison only makes me further believe that all Take2 did was make a scalable game that runs according to the Microsoft Direct X 9 Application Programing Interface and obviously will look better on a Personal Computer that does not have to meet the requirements that a home console needs to meet.
I know and hope you are not making a pc to console comparison but the first time Take2 made their 3d engine, it was incredibly impressive for something that ran on a then hard to program for Playstation 2 and years later got revamped and ported.
One need only look at SEGA's Ryu Ga Gotoku Kenzan! and RGG 3 3d engine to see a more optimized game engine.
I wonder if Nintendo has any interest whatsoever in taking back the hardcore/traditional market that Sony and M$ now own.... I would assume that they don't. Simply because they've been there and done that and realized that it's a cut throat business with no hardware margins (usually losses to start). They've built a very profitable business model with the Wii and DS and I would fully expect them to continue on that path because there is really no need for them to do anything else. Competing in that space with Sony and MS would require huge expenditures on R&D, they would have to take losses upon release and there's little guarantee that they'd ever turn a profit.
I expect nintendo to release several updated Wiis with added functionality, with each release being positioned strategically to boost hardware sales. Down the road they'll release a completely new platform (maybe 2011, probably later though. Depends on Wii sales) but it'll be cheap enough that they can manufacture the whole system at launch for under $100 or so.
Nintendo only needs to make sure that their next game console can handle the games that they need it to run, not some flaky, unreliable fan-person who will claim to be so vocal in wanting a high spec console only to pull out excuses on why he/she is waiting two years to purchase a Playstation 3.
That alone justifies why Nintendo Wii is so successful and why Super Mario Galaxy nailed it as a AAA video game in a console that many are claiming is not for the hardcore just because of its diverse audience being so gigantic.
I do aggree that with Nintendo's prior (to Wii) money and post Wii profits they will obviously afford to make a bigger technological investment for their follow up console that would get released in 2011 or 2012, but Nintendo must be mindfull that they do not exceed a certain price (that they never have anyways) or rely on a single marketing segment of consumers (hardcore).
Its highly possible that chip engineering processes will be much more stable and affordable for Nintendo to afford a very well powered console by then, specially one that can deliver 60fps at 1080p as a minimum standard given that by then more and more HDTVs are expected to be in homes in the Japan, North America and Europe regions and eventually the rest of the world if not already so.
Basically a comparable CPU or multi core CPU, sufficient ram, storage medium and at least a Radeon 4870 single GPU or something around that ball park but on a much smaller die process than 55nm, ie 32nm or 22nm to make the chip acceptable for a game console for Nintendo.
IMHO Sony did everything they could with the PS3, the Nv40 was a power hog when introduced at 130nm and Nvidia greatly improved their technology with Nv47 or G70 at 110nm leaving Sony to make their custom changes for a 90nm chip. It would have been highly desireable if the chip was more powerfull but the fact is that G80 is the power hog again and in the worst way, G92 at 65nm greatly improves performance but is still a power hog so a 55nm or even 45nm die shrink is much more desireable to address all performance issues with having to jam such a gpu into a console, reguardless of what happened and all of the other technology put into it, in my opinion Sony was addressing their hardcore base with the first year of PS3 and that turned into a disaster because of all of the people who felt they could not justify paying the price even though $300 for a PS2 was alot of money back in 2000 and 2001.
Microsoft just carried on their hardcore with promises of more Halo, their killer app that is their foundation and the only reason why the console has sold as well as it did, it also helps that Epic Games became envious of the success of that game series and made their Gear of War game and that those Xbox360 owners welcomed it with open arms, thanks to it being a 3rd person game (to avoid comparisons to Halo which PDZ failed in).
BTW, Take2 Rockstar could easily make a GTA type game that runs specifically on NWii and does so taking advantage of that hardware reguardless of how obsolete we think it is and so can many more game developers as last gen the PS2 held some trully impressive games even to this day with piracy being the main realistic reason why Sony pushed ahead for Blu Ray.