TOKYO (Reuters) - This week’s Tokyo Game Show is one of the world’s biggest draws for gamers and developers, but the talk amid the virtual reality headsets and robot arms is of the industry giant that never turns up: Nintendo Co Ltd.

People play video games on mobile phone-shaped screens at Tokyo Game Show 2016 in Chiba, east of Tokyo, Japan, September 15, 2016. REUTERS/Kim Kyung-Hoon

The Japanese firm, conservative and rarely unpredictable, has twice caught the industry by surprise in recent weeks: first, with Pokemon GO, a wildly successful augmented reality smartphone game, and, earlier this month, by stealing the show at Apple Inc’s iPhone 7 launch in San Francisco.

There, Nintendo’s best-known game creator, Shigeru Miyamoto, announced the firm’s first on-the-go game starring the popular Super Mario character.

It was a rare public splash, and gamers in Tokyo read Miyamoto’s guest Apple appearance as a sign that executives in Nintendo’s spartan offices in Kyoto might finally be catching up with the zeitgeist - tapping a treasure trove of popular characters and consumers’ love of smartphones.

“There’s a huge saturation of mobiles, there are billions (of dollars) being made in mobile gaming ... and Nintendo has realized that,” said Benjamin Outram, a researcher at Keio University, who was demonstrating virtual reality goggles and a vibrating digital immersion suit at the Tokyo event. “Nintendo is an entertainment company so will go in whatever direction they can entertain.”

Super Mario’s short hop to Apple devices is a big leap for Nintendo, unshackling the much-loved moustachioed cartoon plumber from the Japanese company’s dogged resistance to the mobile world.

Nintendo has long held out against offering its games for mobile devices, preferring to keep them coupled to its Wii console business. But Wii sales have slowed - from over 100 million devices in its first five years to just 13 million in the past five - and Nintendo is finally acknowledging that mobiles matter.

“They held their own kind of Nintendo world and did not want to corrupt their own characters and brands and trademarks by allowing their products or characters to be utilized on other platforms,” said Gavin Parry, managing director at Parry International Trading in Hong Kong. “The internal philosophy is changing and opening up.”

Nintendo declined to comment for this article.

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“GAMING DEITY”

Gamers and game developers say Miyamoto, 63 and often dubbed the “Walt Disney of video games”, is key to Nintendo’s shift.

“Miyamoto is not a conventional game maker, he wants to create family entertainment,” said Hirokazu Hamamura, a director at Japanese publisher Kadokawa Dwango and a gaming commentator who often meets Miyamoto.

“Mario is the jewel in Nintendo’s crown, so if they are letting him out it means they are serious.”

Miyamoto, a modest corporate man - who in the United States would likely command superstar status - has described himself as the first non-computer programmer game creator.

“Even people at Sony and Microsoft look up to Miyamoto as gaming deity,” said Hamamura.

Responsible for Mario, Zelda, Donkey Kong and other popular video game characters, as well as the Wii, Miyamoto started out as a puppet maker, and moved on to early designs of Donkey Kong and Mario sketched on paper that he handed to computer engineers, according to media interviews.

He joined Nintendo, which has its roots making playing cards in 19th century Kyoto, in 1977, as the company shifted from making toys to video games.

When computer gaming in cafes, malls and arcades - think Pong and Space Invaders - gave way to more solitary games often played on a bedroom desktop or console, Miyamoto has said he became concerned that gamers were turning into anti-social “zombies”.

The 2006 hit, the Wii console, aimed to reverse that trend, and appeal to a broader audience of those new to gaming or put off by the proliferation of shooting games.

Miyamoto has said he turned his wife into a gamer through social and fitness focused games such as Wii Sports and Nintendogs, a virtual pet training game.

In March last year, Nintendo announced a partnership with Japanese social gaming company DeNA Co to release five free-to-play mobile games within two years. Nintendo says two of those; versions of Animal Forest and Fire Emblem, have been delayed.

“We believe Nintendo will be able to create a new style of games and spread them all around the world,” Miyamoto told Nintendo investors last October.

At the Tokyo Game Show, dominated by yet more shooting games and role-playing fantasy titles that likely appeal to the “zombies” Miyamoto frets about, Nintendo’s Splatoon game for the Wii U - with paint splashing, squid-like characters battling for territory - won the best game award.

Nintendo? Still absent.

“That’s Nintendo’s nature,” said Masao Masutani, who helps develop game software for Sony. “They do what they want and let others get on with their thing.”