With Apple recently announcing the launch of the iphone 3G plus itunes 7 around the corner with an iTunes application store allowing you to download, amongst other things, games, are Apple about to shake up the handheld gaming market?

This is a follow on issue from the Game Hub article I wrote about the potential for dedicated console games to be erradicated in the next decade. The basics of the iPhone's potential new market are rooted in the same issues as why we may see dedicated console games phased out in favour of an "all-in-one" box for all our entertainment needs: essentially why have 2 items in your pocket (i.e. a psp/ds AND a mobile phone) when you can just carry an iphone that does both?

The immediate answer is of course "GREAT" now i can play some games on the train to work without having to carry another item with me. And it seems that this argument for convenience is the main reason for why people such as Brian Caulfield at Forbes believe that Nintendo and Sony are under serious threat from Apple. Also noted is the touch sensitivity of the iPhone and iPod Touch, similar to the DS, plus it's motion sensitive capabilities similar to that of the Wii. Add in to the mix the ability to easily download and stream new games and software into the iPod and this, according to some commentators, makes it a serious contender for your handheld budget.

I for one, despite believing that, generally, companies should stick to what they're good at rather than meddling too far from their core business activity, think that this is a pretty interesting development. The ability to play good quality games on an all-in-one mobile phone/web surfer/mp3 player is an attractive idea without doubt. But this is a long way for claiming that the market is about to be radically changed.

A lot of the gaming market is taken up by existing characters/franchises the most obvious example being Nintendo's Mario franchise. There is a consumer loyalty to characters, brands and franchises that, unless they're opened up to Apple, their customers will not be able to get from their iPhone. And i can't see this happening any time soon.

A large part of the handheld gaming market is held by young people. How many kids are going to own an iPhone i wonder? Not many i dont think - they're predominantly toys for grown ups - meaning that kids will probably continue to use their DSs and PSPs over expensive, complicated to use and fairly exclusive Apple products.

We've also got to look at existing game play habits of those that contribute the most of money to the industry. Within this is the true gaming fan, the person who buys and plays games as an actual activity to spend time doing, not as something to do while you're getting from A to B. This is a radical and important difference to people that buy music, games for their phone or even films for their iPod to watch while travelling. Do you listen to your iPod at home on the sofa or play mobile games in your house? Not often is probably the answer. The iPhone gaming applications will most likely fall into this market - something to do when you're going from A - B. Conversely a large part of the handheld market IS played at home as an activity in itself. This contrast in gaming habits means that the iPhone still has work to do to even enter this dedicated activity market and leave the "en-route" market.

Core business activity is an important factor when it comes to top end products and large companies. Nintendo and Sony are major players in the games market and, due to the size of sony, could both be described as having gaming as one of their core business activities. Apply by contrast don't. Are Nintendo, Sony and, realistically Microsoft too, going to sit back and let apple take a major revenue stream from them? Unlikely I'd say and they'll fight for it tooth and nail with bigger, better products and services.
And finally, I still believe people would rather play a dedicated gaming machine, just as they'd rather play a dedicated console - why? I for one would rather have a box that plays games excellently to one that plays games as well. The games industry is about innovation, new design, pushing the boundaries and grabbing our attention and I don't believe that a non-dedicated gaming platform has the capability, budget or business focus to do that.