Apple Is Destroying the Gaming Industry

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There's one thing that Apple (NAS: AAPL) CEO Tim Cook said on Wednesday that's unbelievable.

I'm not doubting that the new iPad will deliver blazing-fast 4G LTE speeds. I'm not refuting the claim that Apple TV will use iCloud to beam HD video. And Apple did sell more iPads this past quarter than any individual computer company did PCs.

It was actually what may have seemed like a throwaway comment on Cook's part -- working his way up to the highly anticipated iPad unveiling -- that left me shaking my head.

"Users with a gaming console and portable console said the iPad was their favorite for gaming," he said.

Really? So if someone is playing Call of Duty on an Xbox 360 or heaving the Madden pigskin in a Wii football game, they would prefer to be flinging angry birds at militant pigs on an iPad?

I'm a cynic when it comes to the video game industry, but even I wouldn't go as far as Cook did to proclaim that gamers actually prefer the iPad.

The downward trend remains undeniable. Retail sales tracker NPD Group has been reporting diminishing sales for three years, including a whopping 34% plunge in sales of hardware, software, and accessories back in January. Things didn't get better last month, as NPD is now reporting a 20% slide in hardware and boxed software. Even last month's debut of new hardware -- Sony's (NYS: SNE) PS Vita -- wasn't enough to stem the streak of year-over-year industry declines.

I guess we're all playing on iPads, now. Right?

We live in "good enough" times. If a $0.99 app -- or a free ad-supported download -- will entertain someone, that's good enough. If a temporary escape into one of Zynga's (NAS: ZNGA) virtual realms or online word games is enough to kill time in the dentist's waiting room, that's good enough.

Then again, it's not as if Zynga is at its best. It may be growing its overall user base, but dedicated daily gamers are getting hard to come by. The social gaming giant has seen its number of average daily active users fall sequentially for three consecutive quarters.

Maybe there is something to what Cook is saying. More to the point, if he's right about how at least casual gamers feel about the iPad 2, then they're going to love the new iPad.

Apple's shiny new tablet beefs up its guts with a quad-core processor and retina display. There are now 3.1 million pixels on the new iPad. Games are going to look and move great.

The lack of an analog controller is an obvious shortcoming, but that has also forced iOS developers into coming up with games that capitalize on the iPad's strengths instead of its shortcomings.

What if Cook wasn't lying?

Continue?
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At the time this article was published The Motley Fool owns shares of Apple.Motley Fool newsletter serviceshave recommended buying shares of Apple.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

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