Apple tablet stirs up video game business

When Apple introduced the iPhone, it shook up the cell phone business, but it also changed the way people play video games. About a quarter of the 100,000 applications that can be downloaded to the iPhone are games, ranging from the simple "Doodle Jump" to a version of "Grand Theft Auto." Now, with the looming launch of a tablet-style computer — already nicknamed the "iPhone on steroids," with a bigger screen that might have a place in the living room — Apple could pose an even tougher challenge to established players in the video game business. That assumes, however, that potential buyers aren't scared off by a price that might be more than the cost of a Wii, a PlayStation 3 and an Xbox 360 combined. Apple isn't commenting on its unveiling today. Apple's iPhone and the similar iPod Touch brought a new look to games because they have an accelerometer inside that lets people control the action by turning or tilting the device. With a touch screen and the computing horsepower for high-quality graphics, the iPhone lends itself to pareddown versions of console games like "Assassin's Creed" and "The Sims 3." Its size, meanwhile, makes it easy to consume addictive puzzles in 5-minute increments while waiting for the dentist or riding the subway. Now the iPhone, which costs $99, $199 or $299 plus a monthly service plan, rivals gadgets such as the Nintendo DS ($130-$170) or PlayStation Portable ($170-$250), known as the PSP, which were created solely for playing games on the go. It's unclear whether Apple has taken substantial market share away, but the iPhone likely introduced people to mobile games who wouldn't have played otherwise. "We've seen the iPhone and iPod Touch as kind of a starter kit for video games," says John Koller, director of hardware marketing at Sony Computer Entertainment America. "When those customers are ready to graduate into a deeper experience, the PSP is there for them."