Iwata isn't Nintendo's problem. It's Miyamoto

[Mr Khan]

Soundwave said:

Mr Khan said:
Wow this guy really gets it wrong, and fast. Nintendo is *not* a games company at heart. They make their games to sell hardware, that is their role as the hardware maker, to make games that push it. Their compelling first party library is created out of a need to sell consoles.

Understanding as much is essential before one can move forward.

“The hardware is just a box you buy only because you want to play Mario games.”

- Hiroshi Yamauchi

The point of that story is that it is software that drives hardware, not that hardware isn't what they're really trying to sell you.

Nintendo's strategy is predicated upon selling you the box by making compelling games, but the real money comes as a box-maker (or toy-maker, as soleron said). What Yamauchi was saying in the quote is that people don't buy the box if you don't have good games for it (a lesson lost on Iwata at the 3DS launch, though a little less so for Wii U's due to 2D Mario). It's the lesson that Sony learned the very hard way with the PS3 launch, where they thought they had made such a hot piece of technology that the thing itself was desirable.