He is a highly revered figure in the Japanese gaming scene and considered the leading figure behind Nintendo's successful turnaround after he joined the company in the year 2000.
Most recently, he led Nintendo into the rapidly growing mobile gaming sector.
Mr Iwata started out as a programmer in a Nintendo subsidiary in the 1980s and became president of Nintendo in 2002.
Under his leadership, the company launched its hugely successful Wii and Nintendo DS consoles and he is considered the crucial driver behind the focus on easy-to-use consoles, a move that allowed the company to tap into a much wider audience beyond the traditional gaming community.
His death comes as Nintendo expects to double its annual operating profit based on the long-awaited entry in the rapidly growing smartphone gaming sector to counter weakening sales of its traditional consoles.
Last year, Mr Iwata said he would halve his salary for several months after the company was outpaced by rivals Sony and Microsoft in console sales.
Nintendo shares dropped 0.7% in early Monday trading.
