Nintendo President Satoru Iwata said he was surprised at the tumble in the company's share price following the unveiling of a successor to its smash hit Wii games console, adding that the new gadget had to be played to be understood.

Shares in Nintendo fell almost 10 percent in the two days following the company's splashy presentation of the Wii U, which features a tablet-style controller and high-definition graphics, and goes on sale next year.

Honestly speaking, the reaction to (Tuesday's) presentation and what I heard from people I met and the mood of the convention did not chime at all with what happened in the stock market, Iwata said in an interview at the E3 games show in Los Angeles on Wednesday. It's very strange.

But he added that the reaction reminded him of the mixed reaction to the original Wii in 2006 and that it showed that those who had not experienced the new gadget did not fully understand its potential.

In the end, it is easy to get the mistaken impression that this is just a game console with a tablet, he said. People who came to the presentation and tried it out have understood very well that it opens up a lot of new possibilities. But people who have not tried it will find it hard to believe that this controller will change things.

In the year following the launch of the first Wii in November 2006, shares in Nintendo tripled but have since given up all those gains. The stock was down 0.6 percent at 16,080 yen on Friday.

Nintendo is emphasizing its plans for the Wii U to bring together the casual gamers who bought the Wii and the more dedicated core gamers who tend to prefer rival Sony's Playstation or Microsoft's Xbox.

At the moment, there is a barrier between the Wii, which is seen as for casual users and the other companies' consoles, which are seen as for core gamers. We are questioning whether that barrier needs to be there, said Iwata.

To that end, Nintendo worked hard on winning over the third-party game developers favored by serious gamers, who failed to back the Wii.

At E3 this week, both Electronic Arts Inc, known for its sports titles, and Activision Blizzard, the owners of the Call of duty shooter franchise, voiced strong support for the Wii U.

(Reporting by Liana Baker and Isabel Reynolds; Editing by Lincoln Feast)

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