Iwata, who was among the team that came up with the widely-lambasted name (pronounced 'wee'), reminded reporters in Japan that this is not the first time a Nintendo console has come under fire for its moniker.
The Game Boy was criticised at its launch in 1989 because some thought the name suggested that girls couldn't play it.
Iwata has insisted that Wii will catch on just as Game Boy did. Game Boy became the best-selling portable console ever, shifting more than 120 million units by 2006.
Iwata predicted that Wii will enjoy similar good fortune. "I have never thought the name was a mistake. Some people seem to have a problem with it now, but I think they'll grow to like it," he said.
Nintendo's website does its best to explain the Wii name, which replaced the codename 'Revolution'.
"Wii represents the answer. Wii sounds like 'we', which emphasises that the console is for everyone. Wii can easily be remembered by people around the world," it states.
Nintendo even has an explanation for the two 'i's, claiming that they symbolise "the unique controllers and the image of people playing".
Wii is promised for the final quarter of this year, and will not cost more than $250 in the US, according to the company.
The console will face stiff competition. Microsoft's Xbox 360 caused chaos when retailers failed to meet demand at its release last Christmas, and Sony's PlayStation 3 may prompt similar scenes when it goes on sale in November.
But Iwata has said that Wii offers easier-to-play games that its rivals. Wii's unique selling points include a controller that can be used as a handheld pointing device which can detect motion in three dimensions.
Gaming fans can already pre-order Wii games from US sites such as Lik-Sang.com. The games include updates on Nintendo classics, such as Super Mario Galaxy and The Legend Of Zelda Twilight Princess.
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