The iPhone, despite (and perhaps because) the fact that it's not a dedicated gaming platform, has wiped the floor with the portable gaming industry. Only fringe people and parents of young children buy a PSP or DS these days. Taking stats from [this article](1), even a successful portable console like the DS has sold only 50m units since 2004. That's 8 years ago. That's 6 million units a year or thereabouts. The iPhone 4S approached that number by the end of launch weekend.

I can't imagine there are any gaming companies serious about portable gaming who don't consider iOS their primary market. Hundreds of millions of customers who actually buy apps. You'd have to be dumb to ignore that.

In the same way, I expect that if the Apple TV does deliver on basically the same sort of disruption that the iPhone delivered to the mobile phone industry, we will see consoles becoming, perhaps not extinct, but at least fringe. Why buy any console, even a Wii, when your Apple TV already supports thousands of cool games?

Of course, this makes a large number of assumptions about the Apple TV. But I don't think they're that far-fetched (though Apple may choose to go in a completely different direction, of course). So, if a disruptive Apple TV comes out, with its sights set on the TV industry as the iPhone had its sights on the mobile phone industry, you can bet your ass that consoles will be a barely noticeable casualty of this battle (in the same way that cheap HD cams, point-and-shoots, and a wide variety of single-purpose devices are being wiped out by the iPhone without even being its target).

Apple gets convergence. Any tech gizmo industry where you have to buy one device for each piece of functionality you want is in deep shit the moment Apple makes a move in their neighbourhood. Consoles are one of those industries.

[1] http://venturebeat.com/2011/10/13/video-game-sales-drop-6-pe...

Why do people bring up the mobile gaming market as evidence of Apple's move into gaming, when mobile gaming has always been a niche. It's a totally different world from living room gaming. So called "hardcore gaming" is not a niche. It is in fact the mainstream. Gaming stores have mid-night releases nearly once a month for a big title. Hardcore games have the same level of fan enthusiasm as an iPhone release. Let's at least acknowledge what they are up against.

Surely Apple is capable of getting into this market, but that product doesn't look like anything they are working with now.

Actually, the DS has sold nearly 150 million, not 50.

http://en.wikipedia.org/wiki/Nintendo_DS#System_sales_and_ma...

Actually, in reading your post just now, I got an idea for a good startup based in mobile gaming to cut into Apple'e market. That's an excellent statistic, and one I see reflected in electronics stores like BestBuy. I probably wouldn't pursue a startup in mobile gaming myself, but I'm sure someone could, and it'd be quite lucrative if they caught Apple by surprise. The Android market isn't exactly accomplishing that grandiose task right now either - I'd still say there's room for growth. My point here being that instead of waiting for Apple to take over the market (and I could possibly see that with a gaming platform and Apple TV), you could invest in the opportunity presented by the market being displaced before the dust settles and it's much harder.