‘Should games retail fear Apple?’

But our cover story this week is the first time ever the company has publically moved to mark its territory in video games – and you should take note.

Undoubtedly, Apple plans to replicate its domineering success in music with its games and software push. It’s one of the biggest music retailers in the US, having recently outstripped even WalMart’s CD sales.

So given that Apple’s main strength lies in that force once characterised as a comedy-moustache-twirling-villain by industry insiders – digital distribution – does retail have anything to fear from the superpower that is Apple? Not at all.

Sure, the ‘infinite shelf space’ strategy boasted by iTunes and its App Store is a stark contrast to today’s Big Friday for retail, where (as we explained last week) some 50 new releases will be jostling for space in-store.

But it’s this very market explosion that has caught Apple’s eye. And anyway, Apple’s focus is firmly on smaller titles that can be disitributed within a few megabytes at a couple of quid a pop, rather than your average 40 360 title.

And while Apple tells us that it thinks the iPhone and iPod Touch trumps the DS and PSP, it’s not necessarily after the same customers. As our fuller interview next week will explain, Apple isn’t necessarily chasing the dedicated gamer audience, but those who might be interested in games if persuaded – so the company is contributing to the further widening of the market.

However, the people that should worry are those in charge of the digital strategies for the home consoles. Apple’s plan of attack, which mixes must-have hardware with high-class marketing and a laissez-faire content delivery pipeline with generous royalty rates, is the only digital distribution model in the games industry that seems to give a fair chance to all – retailer, publisher and developer alike.

Indeed, goodwill towards iPhone games has gathered so much momentum that MCV knows one Hollywood studio’s games strategy will hinge predominantly around Apple’s hardware.

Fact is, Apple has created an ecosystem of hardware and online software sales that can please everyone. That includes developers or publishers selling software through iTunes (and many of them say it is leagues ahead of Xbox Live, WiiWare, PlayStation Network and even N-Gage), through to canny games retailers selling that desirable hardware, or even iTunes gift vouchers (a tip for a Christmas point-of-sale bestseller if ever there was one).