Excellent question. I've been on record for years as saying that neither Microsoft nor Sony will dare to have a power leap comparable to the PS2-PS3 leap. It doesn't make financial sense for them or for the third-parties that they largely rely upon. If that's the case, I can see the Wii U being the PS2 of its generation: clearly the weakest, but not so much that downports are impractical.
All that said, I'm beginning to wonder just how right I've been. I didn't think Sony would release something like the Vita, for example, yet here we are. Perhaps they're just so wedded, or addicted, to the idea that more power -> more money that they're unable to see the issues ahead?
I was in the same boat, but thinking about it lately, I'm starting to expect a different outcome. Granted, the industry is in a major state of flux, with development costs running out of control and the future of console makers uncertain in a cloudy, smartphoney world. Microsoft and Sony
should release modest upgrades.
But thinking about it from their perspective: The Wii U is mostly a known quantity now. Even if all the specs aren't public, you have to imagine that Sony and Microsoft know pretty damn well at this point what's inside it. They've also been playing on a two-competitor field for a while. Is there really room in the market place for three similarly powered consoles? There barely was before, and I think there's less space for that now. If I were Microsoft and Sony, I think I would succumb to the urge to damn the torpedoes and pump out as cutting-edge a console as possible. Neutering the Wii U would be great for both of them, and they could assume that even if the consoles are expensive, the dedicated/addicted video game population is still going to go with one or the other. And over the console's life the price would drop. Plus, neither Sony nor Microsoft likely has a great idea of how the Orbis or Durango is going to turn out, so there's an extra incentive to try to have something ready to embarrass the other spec-wise.
This might cause an industry collapse if it backfires, but most likely studios would continue consolidating to better absorb risk, and producing what that Penny Arcade article called "AAAAA" games. Japanese developers will probably continue to appreciate the cheaper production environment on the Wii U, but it seems like they matter less and less every generation.
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