I'm not sure if anyone has pointed this out yet, but Iwata IS implying he will resign if that target isn't met. In Japanese corporate culture, saying you are "fully committed" to reaching a certain goal, means that if that goal is not met, you will stand aside; Iwata is essentially publicly taking responsibility for that goal. If he fails in his responsibility, he cannot continue in his current role. It's reported accurately and explained fully on Kotaku, though that important clarification seems to have been lost by other sites.

Iwata has presided over numerous successive quarters where Nintendo have set targets too high and failed to meet targets. Given the high expectations of success Nintendo have after the Wii/DS boom, Iwata will make himself answerable for any under-achievement or failures at the company--as he did by cutting his own pay in half in response to the need to cut the 3DS price. Iwata also insisted last year boosting 3DS in the West and hitting Wii U targets would prevent operating losses, allowing a return to "Nintendo-like" profits before long. 3DS has not been boosted in the West, and Wii U has missed the lofty shipment expectations. A return to operational profit, different from net profit, has not yet happened.

Now while it is incredibly important to stress Nintendo aren't at a moment of crisis that threatens to engulf and bankrupt the company, they are in very real danger of facing years of diminishing returns and their leadership has been lacking. They have set estimates that have routinely been too high, pointing to both a misunderstanding of the attractiveness of their current offerings, and a failure to provide enough compelling content to reach their estimates. I also personally believe that Nintendo's rigid software pricing needs to become more flexible in order to shift more software; pricing every 3DS release at the equivalent of £30 to £40 is not good business when the mass-market consumers expectations have shifted on the back of the mobile/tablet revolution. By no means devalue your software, but to introduce flexibility. Those are the challenges Nintendo, with Iwata at the helm, need to conquer this year if Iwata is to stay where he is. He is fully capable of doing so, and the signs are (key Western 3DS releases, marquee titles for Wii U at E3) that Nintendo have the ammunition to boost their systems in the near term.

The wider point, though, that also needs to be considered, is that while the foundations of the House of Mario are definitely being reinforced and should prove strong enough to reach profit targets in the coming financial year, the House of Mii is far wobblier because of consistent failures by Nintendo to appeal to the wider audience they created. If Nintendo can't begin to address that situation in the coming financial year, then they may very well be facing a return to GameCube/N64 level home console sales as the years go by, pushing them into a corner where by they need another revolution. The audience that bought DS and Wii in their tens of millions are rapidly being fed by a wider and wider variety of devices; Nintendo need to get their foot in the door and attract some of that audience once again. It's a bigger market than before, but where Nintendo once appealed to that market alone, there is now a lot of competition.