Once consoles are capable of 1080p, 60 FPS, good draw distance, good polygon counts, high resolution textures, good anti-aliasing and effects, graphics won't have much more room for improvement. The only other aspects of a game that would benefit from more CPU power are AI and physics. The PS4 and the new Xbox will not have a significant graphical advantage over the Wii U like the PS3 and 360 have over the Wii. We're at the ceiling here folks. I think Sony and Microsoft are going to have a hard time coming up with compelling reasons for consumers to purchase their next consoles. The traditional selling point of better graphics is not going to work anymore.
Once the PS4 and the new Xbox are out, I don't think developers will have to water down their games much to get them on the Wii U. This is because the Wii U will be near the ceiling in terms of graphics.
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