A portion of an Independent interview with Satoru Iwata...

The Independent: Earlier this year Nintendo recorded its first-ever operating loss. Why did that happen and what is the company doing to react?

Satoru Iwata: It's very unfortunate that we had to record a loss and I feel personally responsible for that. My goal is that this will be the only time we record a loss. There are three factors that led this loss. First of all, we were, in terms of the console life cycle, in a console transition phase, so the fact that sales shrank during this period is actually quite normal.

The next factor is that when we launched the Nintendo 3DS last year it lost momentum after launch, so we had to take measures and cut the price in order to avoid a failure toward the end of the year, which meant we were selling Nintendo 3DS units at a loss; these two problems we will solve this year.

The third factor, which is outside our range of influence, is that the global economy situation is unstable and the exchange rate is very disadvantageous for us with the Yen being so strong. Obviously we have no influence over this, so we need to find a set-up at our end that will still allow us to make profit.

I: Did the rapid success of the Wii on its release in 2006 surprise you at all?

SI: I think that the Wii offered something really new, something that hadn't existed before. The more people knew about games, the more sceptical they were about the console; some people were thinking this would be the last console that Nintendo would launch.

At the same time I was convinced that it wouldn't be the last console we would launch because I felt that it had unique value. I was confident we would survive; but I have to admit that, quite honestly, I didn't quite predict the sales that we eventually had.

I: Later this month the 3DS XL handheld launches in Europe. Is 3D on a handheld console something you wanted to explore once, but might not return to?

SI: Seeing things in 3D is the normal state for human beings, it's how we see our environment. But then when we watch 3D TV we're told we have to put on 3D glasses to see it, which for people like me, who wear glasses, is sometimes too much.

I personally think that for TV, unless someone brings out technology where you have glasses-free very high quality TV, then there's not a big market there. But, in terms of video games, 3D has been a topic for a long time.

So why did we introduce stereoscopic 3D into a handheld? Because there are a various circumstances on a handheld machine which make it possible. You have the screen and the console being one, normally you have almost constant distance between [the user] and the screen, so with the currently available technology it is possible to provide a high quality 3D experience without glasses.

So, now we've created the 3DS and 3DS XL and also have some games out there that are really using that 3D effect that we can see, from my point of view, that it's an important element. But give the way human beings are, this kind of surprise effect wears off quickly, and just to have this 3D stereoscopic effect isn't going to keep people excited.

But I think it's an important element, it makes graphics have more impact, it proves a sense of immersion that 2D doesn't have, so I would say generally that 3D is better than 2D. It's nice to have good graphics but not necessarily on their own, so I don't think we'll present [3D graphics] as one of the key features of our consoles but will probably stick with 3D as one of the minor elements of our consoles in the future.