The brilliance of Nintendo's move is subtle but effective. Nintendo Wii U hardware maybe an integral bump from the PS3 and 360, but coupled with it's hardware, it is enough to excite developers. No matter how long Nintendo's head start is, they are guaranteed to have the best version of any core multi-platform game other than the PC. In other words, Madden will look and play the best on Wii U.
Now, when Sony and Microsoft release their respective systems, they have two choices: make a high-end system that is leap ahead of the Wii U or make a system that is an integral step above the Wii U. If they go for the "leap-ahead" option, they are looking at a 6 year generation. Nintendo's Wii U's generation is most likely 4 or 5. So let's do the math: if the Wii U has a two year head start and their console last five years, that means they can leap frog Sony and Microsoft 3 years into their 6 year cycle. If they only have a one year head start, they can leap frog Sony and Microsoft 4 years into their 6 year cycle.
Now if Sony and Microsoft decide to go with an integral step and Sony and Microsoft's console cycle last 4 or 5 years, Nintendo can still leap frog them next cycle. Also, if it is an integral step rather than a leap, then Nintendo has nothing to worry about. Yes their console will be the weakest, but other than better graphics/sound and maybe more things on screen, nothing on those systems can't be slightly down-graded for Nintendo's console. Also, Nintendo has an awesome gimmick that developers will get use to having.
So it's a win-win. All Nintendo has to do is price it right and bring heavy hitting First party software. I believed they learned their lesson with the 3DS on both those issues.