Update: Nintendo has issued a clarifying statement that says Miyamoto has not left his position:

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.

Original story continues below:

Shigeru Miyamoto, the legendary Nintendo game designer who brought the world Super Mario, Donkey Kong, The Legend of Zelda and Pikmin, has announced that he will be retiring from his current position at Nintendo in order to take on a smaller role with the company.

Speaking to Wired, 59-year-old Miyamoto stated that he will be stepping down from his role of supervising huge development projects like the recent The Legend of Zelda: Skyward Sword and Super Mario 3D Land to work on projects smaller in scope.

Miyamoto said that now is the time to move on as he is very happy with how the latest Mario and Link joints turned out and has great faith in Nintendo's internal developers, whom he helped nurture.

While massive projects may not be in the cards for him anymore, that doesn't mean that he is retiring from game development altogether. In fact, Wired reported that he expressed great interest in his future work with younger blood.

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 hopes to begin work on and publicly show his next project sometime in 2012. Now free from extended development cycles, it will be very interesting to see what a leaner and more agile Miyamoto dreams up.

[via wired.com]