This looks like a great step forward (not that it will make me regret my choice of the EM5).
Partly because Nikon and its sensor design partners (Aptina?) seem to be stretching their lead in sensor-based AF and high frame rate options, rapidly reducing any disadvantage of mirrorless systems compared to the bulky, mirror-dependent SLR approach. I like the idea that a new player in sensor design is putting pressure on Canon and Sony, especially if it is a third party designer, not strictly tied to any one camera maker and so willing to sell to all.
But also, the resolution step from 10 to 14 MP is important, to help realize the main potential advantage of a smaller format: a more compact camera-plus-lens kit for a given telephoto reach. That requires not smaller sensors themselves but smaller pixels and thus higher sensor resolution in "lines per mm" which in turn gives the ability to use less long focal lengths to achieve a given telephoto reach. (And similarly for macro enlargement ability at a given minimum working distance.) At 10MP, there was no significant size or weight advantage over a 10MP crop from a 16MP Micro Four Thirds camera; now there is a clear potential for kit size advantage over mFT, NEX, and such.
So I am not bothered at all by the complaints about the Nikon One bodies not being smaller than mFT or NEX bodies: at thris stage body size is dictated by the size of the rear screen and space for fratures like an EVF and external controls -- the sensor size hardly matters, and in fact it seems that Sony could combine its smallest NEX body size with a full 35mm format sensor ... but most lenses would dwarf the body.