People do not buy iPhone because of the games. They buy them because they are mobile phones, and practically everyone has a mobile phone these days.
This does not mean that they will cannibalise actual gaming platforms. People buy the gaming platforms to play games, any other multimedia function is merely a bonus. People buy phones to ring/text people, browse the internet/social network, games tend to be the bonus. Phones are not dedicated gaming platforms.
Dedicated gaming platforms will always exist because there will always be a market for people that want a proper gaming experience, not one that is watered down. Sure people that really care about video games that much might download a game on their phone to grant them their five minutes of entertainment, the likelihood situation is that this type of person would not buy a dedicated gaming device regardless of whether their were iPhones or not.
Gamers will always seek to play games on a device that offers the best experience. Sure they may play a game on their phone from time to time, in order to kill some time before class or whatever. But they will primarily play on home consoles as well as the handheld consoles. Mobile phones sell because they are phones, and everyone and their mum has a phone these days, and update them almost annually because that is what their phone plan under their provider allows them to do.
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