Iwata has said in investor's meetings that they lost a segment of the market with the Wii that they want to get back with the Wii U.
Yes I'm fully aware of what they said. But first of all, Iwata can say whatever he wants, but like the old saying goes, actions speak louder than words. Regardless of the rumors one thing is for sure, the Wii U is not going to blow the current gen consoles out of the water - it could be and probably will be more powerful, but to a great degree? It's not going to happen. With the cost of that tablet and Nintendo's philosophy of not releasing incredibly expensive consoles, it's simply not possible.
Secondly, where in his meetings did he state that the segment of gamers they lost had to be won back with UE4 support and the absolute newest hardware advances? Like I said earlier, regardless of whether the Wii U runs UE4 or not, they will have third party support. Maybe they won't have Epic, Bungie, whatever, but they will have third party support nonetheless. But you guys arguing with me are all talking about the kind of third party support that would use things like UE4, and I'll maintain my point that Nintendo doesn't need that.
From a tech standpoint, Epic is far more likely to support the Vita than the 3DS. But is that going to cause the 3DS to suddenly sell worse than the Vita should Epic do just that? I seriously doubt it. The 3DS is never going to get the third party support from the devs that specialize in bleeding-edge graphics and that's not going to sink the system just like a lack of that kind of third party support won't sink the Wii U. So no Nintendo doesn't NEED it.