NYTimes: Apple’s Shadow Hangs Over Game Console Makers

Apple’s recent foray into video games – with the iPhone, the iPod Touch and its ever-expanding online App Store – is causing as much hand-wringing among old industry players as the global economic slump, which threatens to take the steam out of year-end shopping for the second consecutive year.

Among the questions voiced by video game executives: How can Nintendo, Sony and Microsoft keep consumers hooked on game-only consoles, like the Wii or even the PlayStation Portable, when Apple offers games on popular, everyday devices that double as cellphones and music players?

And how can game developers and the makers of big consoles persuade consumers to buy the latest shoot’em-ups for $30 or more, when Apple’s App store is full of games, created by developers around the world and approved by Apple, that cost as little as 99 cents – or even are free?

"The next breakthrough in gaming is not going to be in hardware," Yoichi Wada, president of a top Japanese game maker, Square Enix, told Game Show participants. "It’s going to be in how to create a successful business model."