A platform for budget developers?

"They won't have to spend a great deal of money and effort developing new software," said Hirokazu Hamamura, president of Enterbrain Inc., a video game magazine publisher.

"They'll be able to capture a client base through the iTunes store," he added, referring to Apple's portal for downloading music and games.

With their high-resolution images, role-playing games for the PlayStation 3 or Xbox 360 consoles often demand budgets comparable to those of Hollywood blockbusters, amounting to hundreds of millions of dollars.

In contrast, a cellphone game can cost just a few thousand dollars to develop.

Media Magic, a company that develops games for Japanese cellphones, is among those firms that seek a bright future for games for the iPhone.

"We saw the iPhone as a threat in the beginning. But since the same device is used all over the world there is greater opportunity for a bigger market," said Mitsuru Oshibo, a content developer with the firm.

About 80 percent of game developers in Japan have dabbled in creating games for the iPhone, according to an analysis of 100 companies by CRI Middleware Co., which creates software components for video games.

But bigger game developers are feeling the pressure as smartphones threaten to sap the industry's traditional source of revenue from sales of games for consoles such as the PS3, the Xbox 360 or Nintendo's Wii.

Apple boasts hundreds of thousands of applications in its App Store, some of which are priced at less than $1.

Analysts say the company attracts at least 80 000 downloads each day, but with prices so low, some developers are wary about jumping on the bandwagon.

"When we look at that business model, we ask ourselves, 'when can we really make the shift'?" asked Shin Unozawa, head of Namco Bandai, the Japanese company behind such games as Pac-Man and Tekken.

"It's quite frightening to think of changing to a different model," he said.

Even so, Namco Bandai said it is stepping up game development for Apple gadgets, showing at the Tokyo Game Show its "Ace Combat Xi" arcade-style action game formatted specifically for the iPhone and iPod Touch.

Rival Square Enix is doing the same, with a handful of titles in the works to be unleashed ahead of the crucial year-end holiday season.

A hardware war

Competition among hardware makers is also hotting up. Apple this month introduced a revamped version of the iPod Touch, with founder Steve Jobs calling it a "great game machine".

That came after Sony released in June the PSP Go, seeking to challenge the success of Nintendo's DS handheld machine.

There is even speculation that Sony is working on a PSP phone, although the company has remained tight-lipped.

However, despite the buzz surrounding the iPhone, some experts doubt that the gadget can lure away hardcore gamers.

"Users do have an amazing variety of choice" with the iPhone, said KBC Securities analyst Hiroshi Kamide.

"But it's probably a quality versus quantity argument whereby a lot of the applications on iPhone and iTouch aren't very good," he added.

Kenji Miura, a 23-year-old who describes himself as an avid console enthusiast, was unconvinced by a role-playing game he tried out on an iPhone.

"It's difficult to handle and the images are hard to see," he said at the game show. "When it comes to playing games, I want to buy a proper console."