There's also talk of an AMD GPU from the R700 family, which unfortunately tells us very little about what we can expect from Cafe's graphics. However, it does fit in with Nintendo's modus operandi in utilising cheap, existing hardware, most likely with console-specific refinements.
In terms of available power, R700 scales up from anything from a low-power Radeon HD 4350 with 80 streaming processing units all the way to the HD 4890 that utilises 10 times as many. Optimistic speculation zeroes in on the HD 4770 as the most likely candidate for inclusion in Cafe, but our sources suggest that the overall profile of the GPU is much closer to the Xbox 360 - and we've even heard that in some applications it may even operate at a deficit compared to Xenos.
While this may come as a disappointment to many, it's important to remember that Nintendo has achieved incredible success in recent years through a combination of factors: new concepts that appeal to a mainstream audience, a price point that's "right" straight from launch, per-unit profitability from day one and not getting involved in spec wars with rival manufacturers. Wii - and perhaps Project Cafe - aren't consoles with 10-year lifecycles in the way that Xbox 360 and PS3 need to be in order to recoup their costs.
Over and above that, we need to understand that Nintendo's primary focus isn't the core gamer audience. Let's assume for the moment that the Cafe GPU is indeed 50 per cent faster than the Xenos chip in the 360 and identical in every other way, perhaps with an eDRAM boost. In a typical third-party game, what would that 50 per cent actually translate into? Would a mainstream audience be impressed with a higher frame-rate, less aggressive LODs, higher texture detail or even 1080p resolution? If you can't achieve a true generational leap in graphical fidelity that would be noticeable and immediately appealing to a mainstream audience, targeting a new controller concept makes a lot more sense.
That leads us on quite nicely to the business perspective. There's a set unit cost Nintendo needs to stick to and what is obvious is that the inclusion of just one joypad/tablet-style hybrid controller is going to take a significant slice of the available budget, cutting down the available cash for the CPU and graphics tech.
While the platform holder could gamble on game and peripheral sales to offset a loss made on each console, it's just not the way that Nintendo has historically operated and it's difficult to imagine anything different here, especially when you factor in an economic climate unlikely to improve that much in the next couple of years.
So what of the rumours of backwards compatibility? Assuming provision for buttons, d-pad and analogue sticks, the new controllers would effectively negate the need for supporting the old GameCube pad socket in the way that Wii did. There's nothing to stop Nintendo using Bluetooth for controller input/output traffic (in concert with WirelessHD or something similar for the visuals) so that would allow for Wii peripherals to work just fine. Nintendo could simply provide a socket on the Cafe unit itself for the Wii sensor bar, but for all we know the Cafe unit itself could ship with its own sensor bar that interacts with the new controllers as well as the old.
Technologically, if Cafe is indeed using an AMD graphics chip and PowerPC CPU, there should be enough commonality with the old Wii and GameCube designs to ensure decent backwards compatibility, though some of the more bizarro elements of the original hardware spec may introduce issues. With over 86 million Wiis shipped, we should assume that backwards compatibility will be of concern to Nintendo as a cost-effective means of giving the new system a headstart of sorts.
What's almost as interesting as the rumours themselves right now are the topics not being addressed by the speculation. For example, how much RAM does Project Cafe have? With the 3DS packing 512MB, we would expect more: at least 1GB. And what about onboard storage: iOS-style flash RAM, SD card support or onboard HDD? Assuming an optical drive, is it DVD or Blu-ray based? Can movies be streamed across to the controllers too?
Then there's the issue of support services - none of which have factored into the current rumour-mongering. From an infrastructure point of view, Nintendo is woefully equipped in terms of a viable online networking presence and is generations behind Xbox Live. Elements in 3DS such as StreetPass suggest that the platform holder has been giving some serious thought to innovative uses of networking, but concepts such as friends codes and the lack of voice chat severely limit the possibilities of the service and make Nintendo look limited and backward in comparison.
We would be surprised and delighted by a technological leap ahead of the current generation, but our gut feeling is that the true innovation surrounds the controller and how the platform holder will make use of it. Interesting times ahead for Nintendo, then. Roll on E3.