Kind of related to my original post:
Perhaps the whole debate of "more power, better graphics, blah blah blah" is a moot point, considering that most indie developers are content with making simplistic games that have a solid gameplay element, instead of relying on flashy graphics and hardware power.
Maybe those big-budget developers could learn a thing or two from the indie developers. Do games really need to be graphically advanced, filled with shaders, HD textures, millions of polygons, massive open worlds, cinematic presentation, photorealism, etc?
If games like Angry Birds and Cut the Rope are any indication, the answer is "no". Some of the most popular games of this generation have been the most simplistic, and the most fun. Minecraft, Wii Sports, Angry Birds, Cut the Rope, Cave Story, etc. all prove that you don't need a big budget and Hollywood-caliber production values to make a good game.
If that is the case, then why have people raised the graphical bar so high, and are expecting Nintendo to go balls-out with the Wii U? Look at the success of all those smaller games that I mentioned. None of them relied on powerful hardware, fancy graphics, voice actors, etc. They got buy with a simple gameplay hook, and that's it.
Developers say they need more power to create the games that they envision, but many developers on the App Store are perfectly fine with the simplistic games that they're making. So my point is, perhaps graphics and hardware power really DON'T matter at all.