Industry leaders at this week's Tokyo Game Show said Apple's ability to host games on its iPod Touch and iPhone could cut into their sales, which are already expected to be soft due to the lingering effects of the recession.
"In the past year, the gaming lifestyle has been transformed," said Haruhiro Tsujimoto, CEO of game-maker Capcom. "Cellphones have become a recognized gaming device."
The New York Times said Saturday the industry is concerned not only because Apple represents a major new player in the market, but because its iPhone applications sell for a fraction of the cost of conventional games.
The new landscape has many analysts and executives convinced that the video game industry will become more focused in the near term on software and their own evolving business models and less on splashy hardware such as the Wii and PlayStation, the Times said.