The Game Boy isn't "last gen" because it was the first handheld video system. It isn't like the Game Gear and Lynx were already out and Nintendo thought "hey, we'll make a black and white system!" They started the whole damn thing!
I guess we'll have to agree to disagree on that. Looking at a GB and a Lynx side-by-side Atari's handheld definitely makes the GB look "last-gen".
I agree that it makes the GB look last gen but it came out AFTER. Nintendo didn't set out to make some archaic handheld that was in black & while while everyone else had colour. Nintendo came first, everyone else followed with handhelds with superior specs. That's not a conscious effort on Nintendo's part to push inferior hardware.
But that's just it, Nintendo DID consciously push inferior hardware. The timing is not exactly analogous, but the technology was available for more and Nintendo did not pursue it, pretty much what nets you a "last-gen" piece of hardware. I mean, I guess at this point we're arguing semantics, but I figure the intentions, which is what we're really talking about, behind either case are the same.
In fact, the GameBoy is also potentially super-relevant to this discussion because it could be argued that Nintendo learned from the GB line that "last-gen" technology wins. From 1989 to 1998, a full nine years, the GB did not get a hardware refresh, and then only one in the form of the incremental (could it be called "Two GameBoys duct-taped together"?) GameBoy Color. Looking at wikipedia spec rundowns I'm starting to actually wonder whether the GBC was even any more powerful than the GameGear from eight years before. And during all this time, the GB fended off multiple competitors with more advanced hardware.
But that's all still beside the point, it's bigger than just releasing so-called "last-gen" hardware. This is about the over-arching philosophy of "Lateral Thinking With Withered Technology." This has been a major trend in Nintendo's thinking for a long time, I think it's inaccurate to imply that their hardware choices today are anything new.
The convention is to increase a console with each gen so even if the development costs increasing the rest of the industry was maintaining the status quo and Nintendo is the one who changed. The Wii was the unexpected move, not the PS3 or Xbox 360. Nintendo is the one that stepped off the beaten path. Sony and MS didn't do anything unexpected or unconventional.
Really? Increasing hardware technology so much that you had to charge $400 to $600 was "normal" when previous console generations (including every Nintendo console from the NES to the GameCube) had almost always hit mass market prices of $200? It may not be the case of Nintendo being underpowered, their competitors may have been overpowered while Nintendo actually held the conventional, traditional course for new consoles.