Nintendo's DSiWare Demo Disappoints

nintendo-logoWill Nintendo be able to sustain its dominance in the rapidly changing handheld game console market? That’s the main question I was looking to get answered when I attended today’s Game Developers Conference keynote from Nintendo President Satoru Iwata. And while Iwata announced a roster of appealing new titles and a much-desired “SD Card Channel” to expand the Wii’s memory capability, the way he presented the latest edition of the company’s handheld line, the DSi, left me disappointed. Speaking before thousands of game creators, Iwata had a golden opportunity to position the DSi against the Apple iPhone (s aapl). Instead, all we got on that front were some cute demos.

Iwata revealed two games that’ll be available via DSiWare shortly after the DSi goes on sale here next month. Similar to WiiWare, DSiWare allows owners to purchase and download new content to their handheld, mostly from third-party developers, which makes it competitive with the rapidly expanding (and often very profitable) market for iPhone games. He got an American Nintendo exec to demo Moving Memo (tentative name) and WarioWare: Snapped!, two DSiWare titles that cleverly use the system’s stylus control and internal camera, respectively. Both look very fun, but I was also hoping to hear Iwata make the case that the DSiWare third-party game development/approval process is superior to that of the iPhone.

Since launching last July, the iPhone App Store now has more than 6,000 games. That’s quite an ecosystem of content with which to compete. And tellingly, one of the other GDC keynotes is titled, “Why the iPhone Just Changed Everything,” a sentiment which with I wholeheartedly agree. But Iwata declined to tout DSiWare as a better system for third-party development, so I’m doubtful his company has gotten that message.