Revolution Report The Wiire has a nice analysis of Nintendo’s possible ulterior motive for not packing Wii to the brim with cutting, razorblade edge horsepower. Shawn White proposes that Wii’s lack of extreme graphical fidelity makes it easier for it to bypass the Uncanny Valley.
For the unaware, the Uncanny Valley is a robotics principle that basically means the more human-like a robot or non-human entity becomes, the more it weirds people out. While a 3D character model may get more realistic in its motions and appearance, the gamer’s subconcious will scrutinize it for it’s lack of emotion, or other shortcomings. And while 360 and PS3 have high graphical standards, their games’ protagonists – steeped in photorealism – will typically fall victim to the Uncanny Valley. Wii on the other hand, will escape it by having less visual realism, more fantasy and imagination, and more realism in movement and animation due to the controller (and Nintendo’s absolute mastery over polygonal beings [my opinion]).
That’s not to say certain Wii games won’t strive for a highly detailed level of visuals, or that PS3 and 360 will always get “too real”– only that Wii will be a little better at player immersion, by allowing them to achieve a satisfactory suspension of disbelief.