The new console might not have as much space as an Xbox 360 or PS3.
The rumor mill for Project Café keeps on spinning. Citing multiple anonymous sources, Kotaku reports that Project Café will have 8 gigabytes of on-board flash-based memory, and while that's significantly more than the Wii’s 512 megabytes of internal flash-storage, it pales in comparison to a 250 GB PS3 or 360.
The sources also say that the discs for the new console will hold up 25 GB of data, an amount that is triple the size Wii and 360 DVDs and close to the single-layer Blu-Ray discs used for the PS3. It's not yet clear if the graphics will top out at 1080i or 1080p, but either way it’s significantly better than the Wii’s 480p resolution.
Of course, the news does come from multiple anonymous sources, so it isn't necessarily to be trusted. We should get the facts when the new console is revealed during Nintendo’s press conference at E3.