"Apple’s assault could even eat into sales of home consoles like Nintendo’s Wii, Sony’s PlayStation 3 or Microsoft’s Xbox, as game-playing quickly becomes centered on cellphones. Many in the industry say that Nintendo, Sony and Microsoft need to explore more radical changes to their businesses, including an emphasis on software rather than hardware and a better way for users to download games."
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Apple’s Shadow Hangs Over Game Console Makers

This recession that we’re in is favorable for Apple and the App Store for a variety of reasons. First, why spend $60 for one game on the Xbox 360 or PlayStation 3 when you can get 60 or more games for the same price on the iPhone/iPod Touch? iPhone apps are our penny dollar candy. While the games don’t necessarily have the depth of Halo 3, Fable, or similar games, they do have elements of storytelling (Rolando) and strategic gameplay (GeoDefense). Still, games on the iPhone have the potential to satisfy for weeks or months on end and they apps are only getting more complex and more interactive between users.

Secondly, the sheer abundance of apps and games, both free and paid, provide way more options than Sony, Nintendo, Microsoft and third-party developers could design and publish for traditional consoles. Again, the games are far less involved but that doesn’t mean that development time has a correlation with customer happiness or the level of fun found in a game.

Thirdly, more developers means for games. The ease and access of the iPhone SDK to anyone means that the usual channels that games have to go through are null and void. Somebody at home in their office with some spare time, like Steve Demeter, creator of Trism, can crank out a game in a short period of time that rakes in profits well over $250,00 selling a game that costs five bucks. The sheer amount of space available makes the App Store a goldmine for game developers. Their main obstacle in that vast space is fighting for face time with gamers looking for their next fix.

Finally, parents thinking about buying a present for their kids aren’t going the same routes as parents did five years ago. In the portable market, the Nintendo DSi retails for $170 while the new PSP retails for $250. The iPod Touch compared, starts at $200 but in the long run the iPod Touch is the cheaper console. 30-plus dollar games for the PSP and DSi compared to $0-10 games for the iPod Touch. If the average kid buys 5 games a year on each console, that’s a cost of $150 per year per kid on traditional handheld consoles and only about $5 on the iPod Touch ($5 is based on the observation that most games retail for 99 cents). While those games are not as involved and not as likely to keep the kids involved for as long as traditional handheld games, maybe the parents spend an extra $20 throughout the year on games for their kids’ iPod Touches. That’s still a measly $25, or 1/6 of the traditional yearly handheld game budget.
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