to me it sounds fairly correct

Yes or no, he said that the industry is getting boring to gamers?  So not only did he manage to make a blanket statement about gamers but about the entire industry as well

Once again I just don't understand how you come off a stellar E3 showing, in which you showcased all your new "innovative" games and then turn around and say there isn't enough innovation, your own company included.

We've seen more innovation in games this generation, from motion control to smaller DLC games like Braid and Flower to 3D graphics without glasses and 3D motion detecting cameras with voice and facial recognition.  The growth of DLC extending games and complete online infrastructures allowing for easy online play accross the globe comes to mind as well.

Honestly, disks, rumble and analogs aside, there was a complete lack of innovation in gaming for most of its existance.  Now you can't even keep up with all the innovations these companies are making. Just kind of dimwitted to say gamers are bored now because of lack of innovation.

No.

He said consumers. Gamers aren't bored. It's why they're gamers. General consumers are not buying as much, and Nintendo is trying to figure out a way to combat that boredom.

Khuutra, so why are non-gaming consumers even a concern then?  The industry is already the biggest entertaiment industry in the world. I'm just not following the logic of this thing.  Maybe you can help me understand.  All I've ever heard lately is of the amazing growth of games from things like the Wii and Facebook games like Farmville.  Its all very contradictory to what he is saying now.

Iwata is a smart man.

The game industry needs to continue to grow. 2010's revenue will probably be lower, industry-wide, than 2009's. That trend neeeds to be reversed as soon as possible. That is what Iwata is saying.

Khuutra, alright well that makes sense.  But there is such a thing as a high water mark, maybe that is what 2009 was.

I mean, I think back to when we were kids.  Gaming more or less died off until the NES reinvigorated it.  There are highs and there are lows.  I just don't think its an innovation issue and I find it wierd that a company that takes pride in their innovation would come out and say games aren't innovating enough.

But thank you for putting his words into a more understandable statement for me.  I've personally, despite being a Nintendo fan, always had a problem with Itawa.  Itawa, Reggie and Miyamoto, all three of them get on my every last nerve.  That's just my opinion and I'm well aware it is not shared by hardly anyone else. But overall I like Nintendo and I do look forward to the 3DS.

To elaborate on this, markets either grow or they contract. Whether they are growing or contracting affects investment in a reinforcing cycle. A growing market attracts more investment (more games, more variety of games, bigger budget games), so the market continues to grow.  A contracting market scares off investment (fewer games, less variety, smaller budgets), so the market continues to contract.

The danger that is to be avoided is that consumer disinterest will result in a collapse in investment that will reduce the quality and variety of games that gamers like us can enjoy, thereby alienating more customers because their niche isn't being filled or because Call of Duty 17 wasn't as thrilling as Call of Duty 16.

So, like any other capitalist system, the gaming market seeks perpetual growth.

Iwata is the best thing to happen for Nintendo. He is very smart.

It's the biggest only measured by total revenue, something around $50B/year IIRC. The big chunk of it are sales of hardware, which is expensive. The rest is software revenue, that was mostly generated by very active gamers, who spend like $400/year on gaming. At the same time social acceptance of gaming is very low (even Nintendo surveys point at that), it's not mainstream and often regarded as counter-culture. If you look at other industries, such as cinema, they're in much better shape due to wider userbase, when single viewer may not spent $400/year on average, but it's more stable financially since it's not relying exclusively on very narrow userbase like gaming.

Iwata want to change this situation, make gaming mainstream for everybody's sake.