It's an interesting reasoning but there's one part I don't understand: if current gen development costs have driven a number of pubs/devs into the ground, why wouldn't developing for Wii U bring about an equivalent result ?
Considering it appears to be essentially a souped up version of the HD twins, what would make releasing games for it less risky?
I've been under the impression these past few years that overbudgeting games, having too much ride on too few projects was the point of failure and I honestly can't see how intrinsically Wii U could change that. I get that "having mid-sized projects" is probably the answer but I can't see why Wii U would spontaneously bring these about.
I suppose the notion is that developers have, after much bleeding, gotten settled with current development standards. The damage is already done, so to speak.
Now instead of telling everyone to get ready, bend over, here it comes again, they can keep producing games on Wii U as they have been on PS360.
Plus, not every game using that range of technology has to cost 50 million in production values. Much of the bloated budgets that have caused the industry to struggle have been due to inefficient development, marketing, and "that hollywood flair" that it was assumed all games needed to sell today.
Japan seems to still be producing genuine mid-range games with smaller teams and smaller budgets. They've just gotten more used to using the technology that western developers had pulled ahead of them with for a few years.
I guess what could make a difference is if the Wii U audience is expected to be different - that they will actually buy sensibly budgeted mid-range games, rather than only flock to the next tentpole release. To me it seems that Nintendo is kind of throwing this stuff out there to see if it sticks. Almost a hail mary pass. Secure Bayonetta, Monster Hunter, and probably more. See if they sell on Wii U.
Something bad that appeared to happen with the Wii, is that cynicism and disinterest caused the good mid-range games that did get released on the Wii to largely tank and go unnoticed. It was the effect of "Gamers want hardcore games on Wii, refuse to buy them when they do get released." There may have been a number of factors contributing to that phenomenon. People got burned on the Wii early on with ten metric tons of 3rd party shovelware, and early betrayal games like Red Steel 1. Followed by 'light gun' versions of the big boy games that the HD consoles were getting. End result: everybody sold their Wii or unplugged it and threw it in the closet. It didn't help that the Wii's technology was probably a bit too conservative for what Nintendo was trying to do. Without even HD output, there was a major presentation hurdle for core gamers to get over as well, since they were much more likely than the average person to have already upgraded to an HD television.
So in the end I think Nintendo is fishing. It's a bit of "okay, we'll play if you'll play too". If stuff like Bayonetta and Monster Hunter tank on Wii U and nobody gives a crap, then I have to wonder: are gamers getting the gaming world they deserve after all?
The salt and betrayed feelings over Bayonetta 2 going Wii U exclusive seem a bit perverse to me in that Bayonetta 1 was not like a longstanding franchise with tens of millions of sales. It barely sold a million copies. That seems like enough for potential future growth, but not quite enough for this many upset fans. That's why the cries of "it should have gone on a real console where it could have sold MILLIONS!" feel disingenuous. If anything putting it on a console that seems likely to emphasize traditional core gamer titles and Japanese games seems like a much better fit for such a game.