i think that the HDD is a possibility but i don't really feel too optimistic about it. The reason for limited memory and graphics and pretty much everything that is limited on the wii is that Nintendo designed the console to be small, run all day, and use very little power. The lead designers talk about why they made every decision regarding the wii in a series of interviews on the nintendo webpage.
http://ms.nintendo-europe.com/wii/?site=v1_01.html&l=enGB
I also think that nintendo is pretty wise to major periphrials in general. Since only a limited number of wii users would buy the HDD, developers who designed games that took advantage of extra capacity would be releasing their product to a very limited audience. This wouldn't be so bad if you could use any external hard drive but i doubt nintendo loves us that much.
also i read that systems with lots of memory can be hacked and users can download the games for free and play them off the Harddrive. I don't know if this is true but i read that it was a problem with the PSP.
However i don't think nintendo expected to be dominating the next gen by such a large margin right out of the gate. "Last console to be relaeaed leads powerhouse competitors by millions of consoles worldwide," didn't seem like a likely headline just before launch. So if nintendo wants the wii to be this generations PS2 and continue to grow and profit for 5 or more years not to mentions regainging the perception of themselves as the industry leader going into the next gen, they're going to have to do something to increasethe wii'scapabilities for online interaction and downloadable content. HDD just might do it too. so maybe....maybe...
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