There actully is a huge graphical update, anaylst say 2-4x power of ps3 in ninty plays their cards right. The tech demos just havent shown it. the fact that cryengine 3 is running at pretty high setting with 60 fps and native 1080p hd says something about power. the zelda demo actually looks better than anything on ps3 its way more detail the lighting is better the water too, you just cant tell with the cartoony style.
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