It's a lengthy answer, not only answered by Iwata, but here are a few interesting snippets.
http://www.nintendo.co.jp/ir/en/library/events/101029qa/03.html
http://www.nintendo.co.jp/ir/en/library/events/101029qa/03.html
I was personally involved in that specific decision making process. After receiving the proposal, I personally thought that it was the right choice because it had the right balance between power consumption and graphical capability. I don't know if this method will be the best choice forever, but as of now, I have concluded that it's a very well-balanced method.
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We did experience a lot of hardships when working on Nintendo 64. When we were working on Famicom and Super Famicom, basically, whatever was promised in the hardware spec sheets could actually be done. However, since Nintendo 64, the concept of hardware has drastically changed to, "the software developers can do anything as they like, but the total amount of the work the hardware can execute is limited." In other words, we were told, "you are free to choose the allotments of the total performance." When just one designer, be it Mr. Miyamoto, me or someone else, did some extra effort in order to make slightly better graphics, the total frame rate greatly decreased. Such things happened, and we had a hard time dealing with them
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Nintendo has recognized the importance of a machine for which software developers can always expect stable performance from the hardware.
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