In a recent interview with GameReactor, Shin'en art director Martin Sauter defended the Wii U hardware and confirmed that it is most definitely a next generation console:
"Of course the Wii U is not the big leap hardware power-wise but it is a big leap to the Wii and to be honest I think we've reached a point where we don't need so much more hardware power - we need better games. For every game you can make it look so good that it's good enough for everybody and I think the Wii U is a good compromise between price point - because don't forget you have a tablet controller, you have a great hardware base and it's much better than everybody reads. It's better than Xbox - sorry, it is better - and you can squeeze lots out of it, but you have to really work hard on it and I think you can make great games with it.
I'm not sure if a much more powerful PS4 will produce much better looking games. We've reached a point where good games will sell and I think the steps will be much much smaller in the next generation."There are many who may scoff at quotes such as this but the fact of the matter is that companies such as Shin'en are not only surviving but thriving in one of the industries biggest falls since 1983 and it is due to smart conservative design that focuses on gameplay and fun as opposed to hardware specs, DLC and milking franchises to death (we're looking at you EA). As we move into this new generation of consoles, expect to see a clear divide between Nintendo and it's competitors where the Big N continues its core focus on what makes video games such a great medium and that is one word, FUN!
Source 1, Source 2