I actually don't think the trade-in thing is too far-fetched at all, IF this speculation is regarding not a new system, but just an enhanced Wii.
Forgive me if I'm wrong, but my understanding is that the motion control things Sony and Microsoft are doing are just add-ons to their current systems. I doubt Nintendo would EVER want to be the only company saying "too bad, so sad, you get to buy a new system entirely."
Is there any way they can make something that would enhance Wii graphics that just adds on to a current system? I'm not a huge tech guy, but I don't know that I've ever heard of such a thing. There was the 32x for Genesis and the expansion pak for N64, but those don't seem anywhere near the level we're talking of upgrade for Wii. Not to mention, Nintendo will most likely want to have a way for people to carry their save data over.
Maybe Wii owners can send in their Wii, pay $100, and get it upgraded for HD capability? That seems far more likely, to me. A new system entirely just sounds like it's too much. It's too much tech, too much cost, too much over-compensation compared to what the competetors are doing. It just doesn't sound very efficient at all.
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