While the showing of the Wii U may have been a little undercooked at E3 2011, Nintendo has actually been working on the Wii U since 2007. Yes, thats the same time the Wii came out. Since that time, Nintendo knew they wanted to add a second screen to the next system but were not sure where to put it.
At the time, LCD costs were quite high so the idea of a separate LCD monitor that would stand on a table was quickly nixed. "Considering how expensive screens were then, it did not make sense to have this big-sized LCD," Satoru Iwata has told Gamastutra. "We would not have been able to come up with a reasonable price point. … We had not decided when we were going to launch the new console, but we knew we needed to be flexible."
They were actually unsure if the next Nintendo console was to be a home console and in fact a portable console, obviously now theyve struck a good middle ground and decide to have a console as the Wii U controller would not have the great graphics or battery life it has with the processor onboard.
Iwata also goes in-depth in the interview on the Wii U v Wii with third party games and more, check out the rest of this interesting and positive interview here.
Source: http://www.vooks.net/story-20243-Iwata-speaks-about-the-creation-of-the-Wii-U-and-more.html
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