The rumors of Nintendo releasing a sequel to the Wii console are now confirmed fact. And now the rumors about what the new console will be like can begin.

Although the device won’t be on sale until next year, the company is clearly a fair way into the development process as it says it will have a playable model ready for demonstration at the Electronic Entertainment Expo, which takes place in Los Angeles in June. The announcement coming today is likely no coincidence: it comes on the same day as Nintendo announced a sales drop has led to a second year of falling profits, so the news of the new product is at least there to offer some good news to investors.

Naturally there’s plenty of speculation about the specs and features of the new device, though surprisingly not much about its name: Stream is the only name doing the rounds, so it’s possible it could be as simple as the Wii 2. (Let’s just hope Nintendo doesn’t opt for Wii Stream…)

Specs-wise, the most common rumor is that it will support high-definition content, though some reports suggest this won’t be as advanced as the XBox 360 and PS3 (presumably 720p rather than 1080.)

As far as features go, it again looks as if the controller will be the main novelty. This time around, so the rumor mill has it, the controller will include a touchscreen that is capable of streaming video from the device.

There’s also talk of improved motion control, which hopefully will be in a separate accessory rather than people swinging an iPad style device around. Purely my own speculation here, but it might make sense for the touchscreen controller to also act as a dock for the handheld controllers so that everything can be recharged at once.

Outside of specific rumors, the general vibe is that it will be designed as a full-fledged rival to the Xbox 360 and PS3, with a price tag to match. Whether that manages to achieve the difficult balance between reaching a casual audience and appealing to hardcore gamers remains to be seen.