UPDATE 2: Nintendo has provided the following statement, which stresses that Shigeru Miyamoto will continue to lead the Japanese company's development.
"This is not true, he will not be stepping down. Video game designer Shigeru Miyamoto's role at Nintendo is not changing. He will continue to be a driving force in Nintendo's development efforts. In discussing his priorities at Nintendo in a media interview, Mr. Miyamoto explained how he is encouraging the younger developers at the company to take more initiative and responsibility for developing software.
"He attempted to convey his priorities moving forward, inclusive of overseeing all video game development and ensuring the quality of all products. Mr. Miyamoto also discussed his desire to pursue fresh ideas and experiences of the kind that sparked his initial interest in video games."
UPDATE 1: Nintendo has moved quickly to deny Wired.com's report that Shigeru Miyamoto is retiring from his current position.
"This is absolutely not true," a Nintendo spokeswoman told Reuters. "There seems to have been a misunderstanding. He has said all along that he wants to train the younger generation. He has no intention of stepping down. Please do not be concerned."
The denial comes as shares in Nintendo fell two per cent to 11,040 yen on Thursday, compared with a 0.7 per cent drop in the Nikkei average.
ORIGINAL STORY: 59-year-old video game legend Shigeru Miyamoto has announced his plan to step down from his current position as head of game development at Nintendo.
Miyamoto, who created the Mario, Donkey Kong and Legend of Zelda franchises, will focus on smaller, personal projects that are quick to complete, Wired reports.
"Inside our office, I've been recently declaring, 'I'm going to retire, I'm going to retire,'" Miyamoto said. "I'm not saying that I'm going to retire from game development altogether. What I mean by retiring is, retiring from my current position.
"What I really want to do is be in the forefront of game development once again myself. Probably working on a smaller project with even younger developers. Or I might be interested in making something that I can make myself, by myself. Something really small."
Miyamoto's shock decision means his role as supervisor on games like Legend of Zelda: Skyward Sword and Super Mario 3D Land comes to an end. He hopes to work on and show off a new project next year.
"In other words, I'm not intending to start from things that require a five-year development time," he said.
Miyamoto said the good job his staff had done on 2011 Mario and Zelda games convinced him he could leave similar future projects in good hands.
"I'm saying this because I have a solid reaction from the existing teams," he said. "I was able to nurture the developers inside Nintendo who were able to create something like this or something like that [Skyward Sword and Mario 3D Land]."
Miyamoto keeps stressing to his staff that he is retiring because "unless I say that I'm retiring, I cannot nurture the young developers".
"After all, if I'm there in my position as it is, then there's always kind of a relationship. And the young guys are always kind of in a situation where they have to listen to my ideas. But I need some people who are growing up much more than today."