I doubt Nintendo's goal would be "to make a Square killer". I think Iwata saw that one reason for the GameCube not succeeding so well was the fact that it lacked a decent library of RPGs. I'm an RPG fan and I missed the genre quite a bit on the Cube, despite a few great titles like Skies of Arcadia, Tales of Symphonia and Path of Radiance (if you class it as a strategical RPG). A lot of the RPGs released ended up becoming ports on other consoles. Phantasy Star Online Ep 1 & 2, Tales of Symphonia (made it to PS2 in Japan).
I believe a console that does well in Japan in the long run needs a good library of RPGs, both third party and exclusive. What Iwata has done is attempt to get the ball rolling in this direction. Clever move.







