And if Nintendo topped them how could Nintendo make that at a good price? The PS3 is $300 so a superior Wii2 would probably be more than that.
Wrong. Because technology gets cheaper as it becomes better, thanks to something called Moore's law.
My first computer cost about $2,000 and had 32mb of RAM and a 166mhz Pentium 1 processor. About 5 years later I got a computer with 256mb of RAM and had a 933mhz Pentium 3 processor. This newer computer was magnitudes of level better than the old one, so you might think it cost more, right? Wrong, it cost about half as much. My most recent computer is a monster with 3gb of RAM and a 64-bit dual core processor. It cost me less than $300.
Can you see what I'm getting at here? The PS3 was cutting edge technology when it was released in 2006, but it isn't getting any better. The console's specs are frozen at that 2006 level, and will never get any better. 2006 era technology can still hold up in our 2010 world and doesn't look too dated yet, but it will inevitably.
Meanwhile, the Wii 2 can take advantage of not 2006 technology, but 2011 or 2012 era technology, and because of Moore's law we know this will be 1) superior to the best 2006 could offer, and 2) be cheaper as well.
Of course, you're probably thinking Nintendo won't make a revolutionary cutting edge console in 2011/2012 and you're probably right, but the thing is even low end technology of that time will still be better than the best 2006 had to offer. That's just how technology works. My most recent computer is actually pretty low-end by current computer standards, but compared to my old computer from 2002 there's no comparison. The 2002 computer was actually pretty high end for its day, but now a budget computer can kick its ass handedly.
And that's basically what I'm getting at here. Nintendo doesn't need to make a high-end $500 console in order to beat the PS3 in 2011-2012. Nintendo can just use more modest components and still cobble together a system that can kick the PS3's ass, just because those components are 5-6 years more modern.
I think Sony boasted their cell processor would defeat Moore's law, but that won't be the case. Newer, better, and cheaper stuff always comes out. Before you know it the Cell processor will seem as dated as a Pentium 1, or whatever chip the Atari 2600 used.