I've been saying since the Wii U came out that a touch screen is great for adding as many customizable buttons as you want, which can add to the gameplay while not adding too much development time to a game, but on the Gamepad, it was rarely used like that and buttons/panels on the screen often had aesthetics prioritized over functionality, meaning it is tough to press in the heat of the action without looking down at your hands. In a sense, placing a touch screen "button area" around the analog sticks make a lot of sense and if the idea was to additionally expand the borders of the game screen to include that "button area when it's not being utilized, that make for a cool aesthetic. This would make for both easy use of the Gamepad for additional functions, only made possible by a touch screen, as well as keeping the ability in more games for off-TV play. It basically combines the most common uses by both developers utilizing the Wii U Gamepad as well as the most common ways gamers would like to use it. I get what they could be going for with the design.
That being said, it does look a little small, not just to hold but the screen real estate (I know it's likely from a dev kit if real). This could change but it is a bummer, especially if it's not able to retain the same 16:9 aspect ratio uninterrupted by buttons (at least to a significant degree). The other thing is a lack of face buttons is really disappointing and while I don't know how they could have implemented the idea without ruining the aesthetic appeal and crowding the space, I was hoping for something that feels like a better compromise than haptic feedback. Even 4 tiny buttons on each side, the size a DSLite start/select button would have been something, but I suppose no buttons gives them more flexibility and works with more different sized hands. Besides, in combination with clickable scrollwheels, there are all sorts of new possibilities so I won't write it off just yet.
On the more worrying side, I'm concerned of developer response to the non-traditional set up will be considering how much they've rejected it in every generation from Nintendo; from when differences weren't as significant (Gamepad, GCN controller) to layouts that felt like too big a departure (N64 controller, Wii). Even if every button and action can be replicated or improved, the added development time, regardless of how small it might be, is just another excuse for 3rd parties to not bother with it or outright skip the console altogether. And besides the never ending (ughhh, not looking forward to this...) whining about gimmicks being forced that people don't want and a cries by gamers/journalists/developers/publishers for Nintendo to "prove" it's value at every turn (even when 3rd parties will ignore great applications with proven sales and gameplay potential when they do succeed at "proving" it), there is the matter of new controls adding to the cost of the console which likely means cost that is taken away from elsewhere (gamers mainly consider this to be a power compromise). As someone who enjoys Nintendo's innovations but does not enjoy the way they typically are received by others and how little they tend to be used organically, even if they are a success, I worry about this move. I don't even care as much about Nintendo having the most powerful hardware since I think the chips are stacked against them no matter how competitive they are (GCN says hello).
On the bright side, I doubt controller innovations are their big surprise here since I see this more as an evolution of the Gamepad than something meant to be brand new, I think they had to have learned at least that much from the Gamepad's luke warm reception, especially since these are lessons learned going back to the DS's touch screen usage. I would say this ruled out a handheld or a hybrid console but it does look oddly portable, it's both slim and sleek (unlike the gamepad or even the 3DSXL) and it has low profile analog sticks that make it much more easy to place in your pocket. The screen extending into the button area also is one way to maximize the screen size for a portable without making it too big (especially since you need space for the buttons as well which increases the width and thickness). Eyeballing this, it looks to be somewhere between the size of a 3DSXL top screen and a Gamepad (likely closer to the former), while the extra button area makes it even wider.
If this is true, I'm going to have to see more to really form an opinion on whether is is good or bad. This could even go beyond what people think of with consoles and handhelds or even what a hybrid of the two could be. I mean, assume there is some sort of on-board processing so you can play pretty simple games offline like VC but you can connect it to your console by wi-fi, even to the point where you are streaming from it away from home when you are connected to the internet (I remember reading from a dev that worked with Nintendo on the Wii U Gamepad wireless tech that it was technically possible to make an extender and even stream games over the internet if Nintendo wanted to implement that ability. Even if it makes it where you can bring it over to a friends house and have multiple people use their controllers with the console. The patent for the supplemental computing device could mean that processing could take place across multiple devices and across the internet and servers. I guess, it would open up all kinds of possibilities, if this were the case, it would just depend on how much computing power the controller would have on it's own and how much that would cost because having in in the same realm as a handheld (~$200) or a Wii U Gamepad (~$100? Not sure how much it costs to replace one) brings it's own problems regardless of the cool potential functionality. Again, I guess we'll have to just wait and see if this is true and what they have planned. E3 can't come soon enough, but not necessarily due to hype for me but due to concern Nintendo botches another console cycle.