Guys the fact that this thread has grown this big is kinda pointless.
These were claims made by a analyst that are totally unconfirmed and ungrounded.
There is no reason to believe that Nintendo would go with something as simple as a firmware upgrade to substantially increase the graphical capabilities of their console..it seems illogical that that is even possible considering this is the wii we're talking about here.
If you break down the wii it is made of mostly inexpensive technology that is utilized in a fun and appealing way. That is why so many MS/Sony fanboys claim its "novelty" will wear out. The accelerometers in the wiimotes that make it such a joy to use are terribly inexpensive.
The system was not built to be the new X box 1 (by that I mean that at the time the x box 1's graphics card and rendering capbilities trumped the current generation of PC graphics cards). The wii can ALMOST match the xbox 1's graphics only there are still some complex renderers and shaders that reportedly the wii just doesn't have the muscle for.
The wii was made to be an affordable means to enjoying digital entertainment brought to you in a new way (not new i know but this has to be the first time I've seen motion sensitive gaming done right)
Even if it is true that nintendo is hard at work making their new HD console we still got a long time before it hits shelves. They most likely are trying to design it at the moment and before they do that they need to re-calculate their budget.
Considering the fact that this is the most ambitious I've seen nintendo since the early 90's back in the 16-bit era, they have to get used to being the popular kind in town again.
Their attempt at rivaling the ps1 with the n64, although it gave us some of the greatest games in history, failed. Then there was the Game cube with its mini-disc format that so many developers found unfriendly or hard to code for, failed mostly due to lack of 3rd party titles, as well as online support.
Now finally they get their shit together. They acknowledge the fact that there is an internet and have sold thousands of dollars in VC games.
They still have yet to jump into the pool of serious online gaming but considering the commanding presence held by Microsoft in that arena can you blame them for being intimidated, and afraid to throw away millions on a move that if not received well could spell doom for their company?
This is supposed to be their triumphant comeback, and if it is to be a success then they can't go all out making groundless promises. They can promise dvd-playback (which they haven't) but will you want it if means sacrificing half or a quarter (mere speculation) of your wii's internal memory to download this DVD channel? That would most likely hinder the amount of space you have left for other things like VC titles, Miis,ect. I think a external device would be a much more realistic alternative.
Then you also have the issue of memory. The fact that MySims reportedly taxes the wii enough so that you can hear (what i presume is the fan) straining to keep up with the heat generated from the processors. This is going to become an issue if you simply wanted to update the graphics drivers overnight via patch, then how would you go about increasing the internal memory to have enough to support said graphics? Mandatory recall of all wiis? I think not.
The success of the wii is based off a simple formula..fun,inexpensive to buy/make,warm/inviting. That is the reason the wii does well. They finally took a gamble and had it pay off. Good for them. Now they need to strategies how to keep the success going using the unexpected success/profits from wii sales. They still haven't got it just right yet, but at least they're moving in the right direction again (finally).
So if HD is THAT important to you as a gamer and you simply MUST have Mario in Hi-Def then you're just gonna have to wait a bit longer until The Big N can afford to create a system built to support HD. But like Ninty said most people still have regular Tv's in the home so there is no reason as of yet to make the customer invest in HD technology when it isn't even he standard yet. Just wait till next-gen. Then we will have Hi-Def and hopefully a system with horsepower to rival that of the ps4 or new xbox (whatever they may call it)..just have patience, and faith and nintendo won't let you down.