HOWZAT

But with a reputation as a mean – even stingy – negotiator, quite open to playing suppliers against each other to secure the best deal, it's not surprising he's also taken issue with his sector's severe economics.

"You must know when not to follow the traditional way of thinking," he explains. "It is very odd to think that so many people still believe consoles have to make such huge losses at the start."

Odd indeed, but for years manufacturers have developed and sold consoles as loss leaders in order to profit from larger margins on software later. In that tradition, Sony committed itself, at a cost of hundreds of millions of dollars, to co-developing the PlayStation 3's powerful Cell processor from scratch. By contrast, for the follow-up to the DS – the Wii – Mr Iwata bought a much cheaper chip off the shelf. It has followed that games are much cheaper to make for the Wii, an advantage in attracting third party games developers. One estimate puts the average Wii title budget at $5 million. The equivalent figure for the PS3 is up to four times higher.

Largely because of Mr Iwata's thrifty innovation, analysts predict that each Wii is being sold at a $50 profit. "It's not as much as that, but it is making a profit," is as much as he will confirm. To put that into context: each PS3 is said to making Sony a loss of up to $200.

Since being released 33 weeks ago, the Wii, Mr Iwata adds, has effectively been "continuously sold out". Analysts reckon it is outselling the PlayStation 3 and Microsoft's Xbox 360 by at least two-to-one. Mr Iwata reckons 14 million will be sold this year.

This new dominance – when Mr Iwata took the job, Nintendo's GameCube was placed a poor third in a three-horse race – has been enough to make his rivals look fresh out of ideas. An exasperated Sony has already seen Nintendo, a company with an eighth of its revenues, surge fourfold in two years to match it in stock market value (¥6.6 trillion - £27 billion) last month.

This week, in a move that smacked of panic, Sony slashed the price of the PS3 in the United States, to $500 from $600. "A very red-ocean act," as Mr Iwata puts it.

The big question, however, is: how long can Nintendo stay ahead?

"There is no doubt that our blue ocean will turn red," Mr Iwata concedes. "Microsoft, for example, has made it clear that it wants to follow our success."

There are also doubts over the longevity of the Wii. Sceptics say it's core technology – that cheap chip – belongs to the last generation of machines and can't be masked by a cute "magic wand" controller for too much longer. While the PS3 could be relevant for a decade, the Wii may struggle to avoid looking terminally jaded much after 2010, they add.

Mr Iwata says that he just doesn't know how long he has before the console is consigned to the great landfill of history. "We are planning for several eventualities," he says. "But it is hard to know as what we are doing is changing so much in the industry."

In the meantime, he's just released three new cute controllers – including the Balance Board, a pressure-sensitive mat that tells you when you're overweight and monitors your exercise regime's effectiveness. That's right: there's nothing else quite like it on the market. Mr Iwata is swimming hard, and against the tide again, to get to his next blue ocean.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive