Do you think N1's PS3 SRPG is going to be a jump from sub 320x240 sprites to 1280 x 720 sprites? At best N1 will attempt 640x480 sprites, but most likely they will continue to use their 320x240 sprites on PS3. It's likely they'll just have an option for "display" that allows users to play at a scaled 720p (default) or original resolution.
Honestly? I'm not even sure if they'll stick with sprites (though it would be interesting if they did). I'm halfway expecting them to come out the gate with something more akin to Rumble Fish's take on making a "2D" title, which will still allow them to more or less stick with what they know works, but could stand to be upscaled for the sake of looking better in a HD resolution, all while using a technique that's still much less taxing than making a brand new series of sprite sheet from scratch.
I mean, let's be honest. N1 enjoys a good following, but they don't exactly have that much money to throw around, nor the manpower, such that they could dedicate themselves to making a fresh batch of HD-ready sprites. If Banpresto doesn't (and they actually HAVE one of the biggest publishers in Japan, Bandai-Namco, on their side) I doubt N1 would.
Also, I'd like to ask. For all the 2d enthusiasts (shmups/fighters/gust/n1/flightplan) who believe these games won't be possible on any system other than Wii because of the HD issue. What do you propose will happen next-gen when Wii 2 is a 720p or 1080p machine as is Sony/MS? Do you think that will be the ultimate death of 2d gaming forever and no 2d titles will ever appear on home consoles again?
Well, that depends.
If, come a few years from now, the likes of SNK, ASW, Treasure and the various makers of turn-based SRPGs and/or shmups are fully ready to jump to HD ready sprites, because the technology would (ideally) be cheaper, more wide-spread and they would be ready to play catch up, then so be it.
However, if that is not the case, then the 2D developers would just have to face up and either come up with another means to stay true to what they want, or they may have to indeed compromise their wants to stay in the business. Or, they could just fold.
2D gaming is just going to keep shrinking as the market for it shrinks, and the costs of making game rise. So, it'll definitely be interesting, any where from like 5-10 years from now, how many of the dedicated 2D makers will be left, and who else we'll unfortunately be saying goodbye to as time goes on...