But don't count them out yet, says analyst Michael Pachter -- he says the iPod touch is the "most dangerous thing that ever happened to the [major video game] publishers, ever." Apple's main handheld gaming device is $200 this Christmas, but he says next year it'll be $149, and the year after that, maybe $129. When, in the future, you can put down $99 and walk away with an iPod touch, says Pachter, then "every nine year old kid is going to have one of those instead of a DS or a PSP, and if you train kids that this is the game that you want to play... How about Tetris? Why would you pay USD 20 for Tetris when you can get it for USD 6.99 or USD 3.99 on iPod touch?"
Interesting point. It's true that console manufacturers have been hesitant to lower prices on their products (in fact, Sony's latest version of the PSP actually had a price increase), while Apple seems committed to pushing the prices on iPods ever cheaper. And yes, as long as companies keep releasing the same games on both devices for $30 on the DS and less than $10 on the App Store (and why shouldn't they -- no packaging, no distribution costs), people will go for the cheaper one. I don't expect to see the iPod touch as a huge winner this year (as a gaming competitor, I mean -- of course it'll sell by the truckloads), but Pachter seems right: wait until the prices drop, and the iPod touch might have traditional gaming devices shaking in their D-pads.