According to an interview with The Telegraph, Iwata was quoted as saying the majority of consumers will not be able to tell the difference between the new Microsoft and Sony consoles when compared graphically to the Wii U. He also states that more processing power and higher specs will cause more work for developers. Is this really the case?
I'm not familiar with what the next generation of gaming will bring graphically and how big of a jump it will be, but graphics do get more and more life-like every generation and continue to surprise me to this day. As for being able to notice a difference between the consoles, we'll have to wait and see but I believe we haven't reached a complete saturation point yet for graphics.
As for higher processing power and higher specs causing more work for developers, I don't know if that is the case. Just because a system is all powerful, doesn't mean you have to make use of every performance boost provided. If that was the case, then we shouldn't be seeing games like Mega Man 9/10 on WiiWare...
Regardless, the Wii U has a lot to a work to do in the end. It has to maintain third party developers and while it works for porting this generation's games, it will have to be able to handle ports of next generation games as well to stand a chance. We could be reliving the same Wii vs. PS3 vs. XBOX 360 battle again even though Iwata says, "My impression is that the things that happened with Wii v 360 or Wii v PS3 won't happen again." My believe is there will be a jump graphically and the Wii U will not continue to get the ports. These graphics jumps will continue until there is truly a breaking point. I don't think we've seen the end of higher end graphics and let's hope the Wii U can keep up.
Also, the Wii U will suffer from the same fate that the 3DS started off with... a try before you buy kind of mentality. With the 3DS, no one knew if they could even see the 3D effect before trying it. People won't know what the Wii U is or how the two screens truly work without trying it first and when you bring in a new casual gaming market to the fold, they may not be so willing to go out and try the Wii U or even think they need another console.
As with anything, only time will tell.