Part of that discussion was a line of questioning regarding the oft-rumored and speculated idea of Nintendo developing and releasing their software on third-party smartphones. Iwata responded:
"This is absolutely not under consideration…"
There it is, plain as day. Certainly, the rumors will persist as phone adopters will likely fuel the mill with a desire to see the likes of Mario on their devices, but Iwata has made it absolutely clear. He goes on to explain his, and his company's, logic:
"…If we did this, Nintendo would cease to be Nintendo. Having a hardware development team in-house is a major strength. It's the duty of management to make use of those strengths. It's probably the correct decision in the sense that the moment we started to release games on smartphones we'd make profits. However, I believe my responsibility is not to short term profits, but to Nintendo's mid and long term competitive strength."
Let's pan that last block of quote out a bit, and I really do encourage you to chime in with your own interpretation of what Iwata offered up. The company feels that they're in a long-term beneficial situation by exercising their in-house hardware development capabilities. By keeping their own software on their own hardware, they are ensuring that their games will always be limited to consumers that buy their consoles.
Consider it like, perhaps, HBO. HBO sells their shows and movies at a premium price. They do not license their content out to streaming services like Netflix. In order to watch an HBO product, like The Wire or Boardwalk Empire, you have to actually buy it from HBO by subscribing directly to the service or purchasing the seasonal releases. Their content remains an exclusive premium, and consumers have to buy into their entire model in order to enjoy it. Sure, they could turn a quick profit by licensing it out to streaming services like Netflix, but then their content loses its premium nature.
Look at Sega as an example of a once-hardware manufacturer dealing software to other platforms. As soon as the Dreamcast kicked the bucket, Sega started putting their content elsewhere.
Guess what… like Iwata said, Sega ceased to be Sega.