Actually, he said that they have to make games that smartphones can't do, not that they are currently making such games. Given how many of Nintendo's games are lazily cloned and thrown up on iOS, I'm not sure he could make that claim.

Both are right.

I never understand all this forecasting up and down stuff, and personally I think its a load of none-sense. For example:

"The company cut its full-year software sales target for the 3DS to 70 million units from 73 million, it said in yesterday’s statement."

Seriously? Is this a huge problem? I mean if you PREDICTED to sell 73 million games, and OOPS now you're PREDICTING to sell, just 3 million less than that, is that really something to be worried about? Now if their new prediction was to sell 70 million less games, I could see that is a clear and present problem.

I don't get why analyst keep trying to link smartphones to dedicated portables. Truth is most smart phone games don't sell anywhere near as much as a dedicated portable blockbuster with the rare exception that is Angry Birds and a few puzzle classics like Tetris or Bejeweled and such. Why they keep bring up hardware numbers like those mean something is weird to me.

I get they are rival entertainment devices but like Iwata said, you aren't likely to get anything close to a normal retail release on a iPhone, save maybe a side scrolling platformer or a few odd balls like Infinity Sword.

This is the most important and truthful quotation:

“The chances of consumers buying our software would be less and less if what we make isn’t so much different. We have to make games that smartphones or tablets can’t do.” - Satoru Iwata

Iwata's quotation only mentions software, but it applies to hardware as well. I think part of why the PS Vita is underachieving is that it wants to play by the rules of smartphones, tablets, and other similar devices. The 3DS plays by its own rules, for better or worse.

I would like to see some evidence linking the rise of smartphones and tablets with the perceived decline in handheld gaming. Are there any studies out there showing how much of this is correlation and how much is causation?

I like how Iwata always sounds like the smartphone argument is bogus. I agree.

Seriously, are these people even looking at sales numbers? And this is even coming from a Japanese analyst, you'd think they be happy. With the 3DS still doing better numbers than DS did at the same time, how can people be this pessimistic? Sure, likely it'll change after we get to the point in time where the DSlite was released, but even then, 3DS is doing very good.

And I won't even get into the FarmVille point.

“The chances of consumers buying our software would be less and less if what we make isn’t so much different. We have to make games that smartphones or tablets can’t do.” - Satoru Iwata

Like another Mario game?

Why don't analysts see that 3DS is doing great?! It's selling really well, and I predict it'll sell 120m units before all is said and done - and that analysts will predict the d00m of Nintendo then...

The DS Lite was released March 2, 2006 in Japan -- exactly 15 months after the original model's debut.

The 3DS is about 20 months old in Japan already. It is outpacing the DS Lite... for now.

3DS software will fall behind the DS even in Japan (timed with launch) pretty soon, DS really started to put up some monster numbers about this time.

The bigger problem for Nintendo is software I think. Even in Japan, I saw some write up that showed they've sold maybe about half the amount of software the DS did.

The two Brain Training games alone were huuuuuuge on the DS, so was Nintendogs. Those bubbles have burst for Nintendo and NSMB2 is trending no where close to NSMB1.