How so?
Did the HD consoles recently start to slump in sales vs Wii?
Did the low priced Wii bundles dominate sales this past Christmas?
Are people unwilling to spend $399 on a console bundle? (see: Kinect + HDD bundle price)
Taking a look at recent data suggests not only is the hi-end console market viable, it's thriving.
The only thing different is it isn't dominated by Sony anymore. There are no seismic shifts in sales away from consoles or console games and in the console space, there isn't a dramatic shift toward cheaper either ... so with that said, I'm not sure where all these people are getting the impression that nextgen will be a gimp-fest of wii clones with gimmicks.
I think it's safe to say that what to expect nextgen is a lot more xb360/ps3-type than Wii-type.
And the reason for that is simple, both MS and Sony already have their "wii consoles" on the shelf right now. They did the "mid cycle refresh" and as the prices come down, both ps3 and xb360 can comfortably fill the role of casual/mom console while being profitable and shrinking in size.
This leaves room in the pricing bracket for high end consoles (which are necessary to differentiate the growing onslaught of tablets and smartphones).
A change from this would have to be accompanied by an aggressive 2 year refresh Apple-style model with forward compatible games.
Otherwise, these fresh new consoles will have ipads breathing down their necks before their replacements are ready.
It's different because Wii happened, and it sold over 90 millions units. You don't need a huge leap in power to differentiate next-gen. Yes, Kinect and the 360 are selling well, but this is at the tail end of this gen, when prices are lower than initially, and there is something that to differentiate it and make it the "hot" item in Kinect. The 360 experienced its best year yet, largely due to Kinect, and a good majority of that crowd doesn't care about graphics.
Obviously, this is just my stance on next-gen. I could easily be 100% wrong, but, to me, going for power doesn't seem to fit Microsoft's strategy (or at least the one that I think they're going for). See, the main reason why they started the Xbox brand was to invade and dominate the living room. Now, they're in the process of doing just that. They have Xbox, Live, and Kinect. From what I see of Microsoft, Kinect is clearly a large part of their future, and Xbox is FAR more than just games. They want to have the Xbox at the forefront of the living room, utilizing Kinect and Live to access all your entertainment needs, like TV, internet & apps, music, movies, and games. If they want to succeed in that goal, I don't see how they could make a giant, loud, power-hungry, hot console, and they especially don't want to repeat the same RRoD fiasco. I just don't see the average consumer wanting that big box in their living room, or for even some, it might not even fit in their entertainment center, etc.
In order to make it appealing, I think they would have to make it smaller, sleeker, and quieter. And to top it off, I doubt next gen they will sell Kinect/Kinect 2.0 separate. They want Kinect in every household. That right there is going to be additional cost to the overall console package.
And for those UE4 comments, they definitely don't mean that Wii U wouldn't be a platform. Like Rangers said, the name may change (I fully expect it to), and Nintendo has been oddly secretive about Wii U developments. Take for instance the Darksiders II trailer. The Wii U logo wasn't found at the end. Or for Project CARS, they initially had a picture on their website with the Wii U logo, only to have it removed shortly after.