Originally Posted by PaulMJohnson
The problem is, gamers (the people who spend billions yearly in this industry) can pan it as much as they like, it won't change the fact that the current business model for the games market is increasingly shaky. With games costing hundreds of millions to make for the big games consoles, it won't be long until the whole thing becomes unsustainable, and something like iOS in the living room will be welcomed by the developers.
What will dictate the winners and losers in the games console market isn't what the gamers want, it's where the money can be made.
I'm sure gamers who want a handheld console would prefer the PS Vita over an iPhone, but I'd rather be invested in a company making games for the iPhone.
You have stated the one truth most people are ignoring - what succeeds will be what gamers want. That principle neatly negates your first paragraph. The existing games development model exists because it delivers what a lot of gamers want, the immersive high production value A ranking games.
You might as well argue that the exiting model for the production of Hollywood style blockbuster movies is broken, It can't last. Small independent French art house style films will slip in and take over when the big studios and their huge edifice of high cost, high production value films topples into the dust under it's own unsustainable weight.
As with Hollywood blockbusters, the top selling games are mostly those that cost a lot to produce. Modern Warfare 2 is said to have cost between 40 and 50 million - as of January 18, 2010, it had taken over 1 billion in sales. Such a broken business model.
Most of the top games of recent times have been those with high production values like Halo 4, Assassin's Creed 3, Battlefield 3, Skyrim, Borderlands 2, Far Cry 3 etc. Although a lot these games are visually impressive, they could have been a lot more so had the current console hardware not been frozen at 6 year old tech.
Arguing that the Apple TV style hardware can easily crush existing consoles is rather missing the fact that the Xbox and PS consoles are both due for replacement this year. Any hypothetical Apple TV gaming system is going to have to be competing with the new consoles, not the old. My understanding is that mobile GPUs will only get to match the current Xbox 360's GPU capabilities later this year - by which time the GPUs in the new consoles will be way ahead. I have seen an estimate of the GPU capability for the next Xbox, which touts AMD 7000 series graphics capabilities, which if true, would slightly trump iOS GPUs.
I really don't see Apple ever providing enough GPU grunt to take on the next gen consoles. Nor would they ever provide enough memory, SD, or disc based storage. Both consoles are rumoured to include Blu-ray drives. A game disc could therefore hold 50 Gb of date, which is now necessary given the scale of some modern games. Battlefield 3, Halo 4, Mass Effect 2 & 3 all come as 2 DVD disc sets.
iOS gaming is a completely different market to the one the Xbox and PS consoles cater to. Unless Apple provides hardware capable of running the A rank games, I don't see them displacing consoles, and given their liking for relatively enormous margins on their hardware, I doubt they will compete in this particular entertainment arena.