I think it's ok though not great, and that's what Iwata said as well. According to mrstickball, Microsoft have sold 17 million downloads on XBox Live Arcade (including a few million give-aways). The Famicom Mini series on the GBA has sold close to 5 million times in Japan only, according to Vgchartz.
Both numbers suggest that 10 million are ok. VC has always been a niche product, but at something like $75 M in revenue VC is bigger than any single full price game on the Wii so far. I do think that Nintendo could promote it better and make the shop more accessible.
I think WiiWare will sell a little faster, though not much. Depends what quality the titles will reach by the 2nd or 3rd year.
Hardcore gaming is a bubble economy blown up by Microsoft's $7 $6 billion losses.
