The following rumour sounds about right, considering how Nintendo operates…

720p appears to be the ‘sweet spot\’ for the definition of games running intensive visuals on the Wii U controller

Wii U controller can handle 480p (Considering the 6.2\” screen, this may not look that different from what you see on TV)

Wii U controller can be used for viewing of on-TV action from a different angle in games

There are some third party games using this for a game play advantage

V5 dev kit is more powerful than V4, but doesn\’t allow for 1080p in these kind of situations

Games will benefit from a slight visual boost over current-gen HD systems and may run at a higher resolution

Simpler titles may be able to run 1080p in conjunction with the controller