After watching the GDC keynote stream, I thought Iwata did a great job conveying some of the current concerns of the gaming industry and ways on how to start correcting them. As expected of Iwata, he was a class act all the way, citing numerous competitors on their achievements in pushing the gaming industry forward in his 25 year retrospective (calling out even XBLA and Sony for their specific ground breaking contributions.) Outside of the 3DS commercial break starring Reggie, I thought it was a genuinely good address to the industry.
Listening to podcasts post GDC though, it seems like a lot of people are just trolling his keynote. Comments like Nintendo was lashing out at Apple (who doesn't even make games) and that Nintendo was blindly hating on $0.99 App store developers is completely false. Iwata's argument was that he wanted developers to take pride in their software and not think that the only way they can be successful is if they offer all their hard work for next to nothing (or free) consistently. It's not like Nintendo is advocating people to put out shovelware at full price and expect it to sell, they themselves said that if their going to sell a game at $30, that they are gonna make sure it's worth that amount.
There is no reason why $0.99 games can't stand side by side with $60 releases and everyone not be successful (this is already the case on Steam). But thinking that the gaming industry can be sustained off of the App store business model and still be able to put out the diversity (in both quality, length, and variety) of games that we are currently enjoying is just folly. I'm all for cheap games too, but there's no way that developers will be able to put out big budget games with any consistency. It's just as ruinous to the industry and an extreme practice in the other direction as companies are doing today with just focusing on multimillion $$ game studio bankrupters.
For the industry to improve, we need ALL the price markets getting attention in equal measures. Iwata's caution was for developers to not put all their eggs into the app store lottery basket and to realize that their work is worth more than just "free". How did that just fly over the heads of so many people?