I think you carved a significant piece of Iwata’s comment off. From the Q & A:
Many people say that when a platform loses its momentum, it tends to receive little third-party support, but I think it is not a matter of the number of titles but the real problem lies in the availability of popular software that is selling explosively. You might somehow misunderstand that Wii had a lot of games from the start, but Wii and Wii U had a similar number of titles in their launch periods. However, Wii had “Wii Sports,” a title that could be enjoyed alone or with a group of people, whose appeal was easy to understand and communicated itself widely. Many people have said that “Nintendo Land” is a great game to play with a group of people, but its single-player experiences have not been received as well. As a result, “Nintendo Land” differed in its ability to appeal to consumers and communicate its simplicity.
Of course, we have to learn from our mistake in the first half of last year in which we failed to release a sufficient amount of software, but the reason that became such a serious problem was because there weren’t enough titles that sold over an extended period, continued to provide buzz in society and remained active. This is more of a question of quality, not quantity, and the problem is that we have not been able to release winning hits. Creating winning hits is something that I always discuss with Mr. Miyamoto.
What Iwata seems to be saying is that the Wii U quantity at launch (more titles than Wii) did not mean that Wii U had sufficient quality at launch. He seems very aware that there is a quality problem… the question is whether he recognizes what caused the lack of quality.
Oh, he knows what is causing the lack of quality. Iwata may be president in name, but the reality is that Miyamoto will do whatever he wants. If Miyamoto goes public at E3 2008 and says he is making Pikmin 3, then Nintendo must spend considerable resources to make Pikmin 3. Iwata is an extremely smart guy (they all are), but it is clear that making Gamecube-esque games aren’t going to ‘provide buzz in society’.
I don’t think Iwata can control Miyamoto.