According to reports from Kotaku, Nintendo's HD system, codenamed Project Cafe, will feature 8GB of Flash-based memory.
It's a big leap forward for Nintendo, especially when compared to its previous outing; however, 8GB still falls short of the competition. Both the Xbox 360 and the PS3 offer hundred of gigabytes in hard drive space.
The amount of space will be enough to download plenty of retro titles, but Nintendo will not be able to offer newer downloadable games for gamers, most of which are easily hundreds, if not a couple of gigabytes in size.
Reports also suggest that Project Cafe will use a new disc solution that rivals that of Sony's Blu-Ray, offering 25GB of disc space. Previous updates on Nintendo's new HD system also suggest that hardware specs are slightly better than that of both the Xbox 360 and PS3. Even Final Fantasy XV is rumoured to release on Project Cafe.
It's all still pretty vague and not much has been confirmed. Stay tuned for E3, which kicks off on June 7, Nintendo's set to officially announce the system.