I can see why he said people will refuse to pay a premium for a software, but what about hardware? Most smartphones these days are going for £300-500, or £200-£400 a year for a contract, yet every kid has one. It's not down to affordability, it's just down to the fact that not many people care about playing real games and are not willing to pay a high price for a dedicated portable.
Back in the day, if a casual gamer wanted to play games, they had to buy a dedicated console and ended up playing REAL high budget games. There was no inbetween, they either played proper games or they didn't. Smart phones have created a middle ground for these so called "gamers", they can now play games without forking out a lot of money, they might be shitty, over-rated little arcade games that keep you entertained for about 5 minutes, but that's all they need.
