The market is different in Japan. The VG industry had been declining for a while, as indicated by the increasing focus of Japanese companies to the western market. So, there are less and less people who could be called 'real' or 'hardcore' gamers over there--the ones who have been driving the industry. Folks who grew up playing Dragon Quest on the NES may not have touched a game controller since then, so something with 2 analog sticks and 13 buttons would be intimidating to them. People who never even played games would be intimidated by it.

The DS changed the market. While the touch screen may be more complex than a bunch of buttons, it's more accessible when utilized practically. The 'Non-Games' that come out for it have people who don't play games buying the system. These non-gamers are now driving the sales--they're the new market. $400+ systems with features they don't understand do not appeal to them because they can't justify the cost. Not to mention the 13 button controller.

So I can understand where Japanese Wada-san is coming from. It might not be particularly true for the Western market, where there are still plenty of hardcore gamers, but over here the casual/non-gamers are growing as well. I doubt the market will sway as much to the casual side as it has in Japan anytime soon, but us 'hardcore' gamers are not the only target on the shooting range anymore.