Analyst comments core of Apple-game rumor

What we heard: Another company entering the console gaming market may seem like financial suicide given the cutthroat nature of Sony, Nintendo, and Microsoft, but one name has been repeatedly bandied around as a distinct possibility.

Apple Computer, which has experienced a boom since it brought the iPod to market in 2001, was most recently rumored to be getting its game on in May, with an ultrasecret gaming division being established internally. Further proof that Apple was targeting console gamers came in September, when Apple announced games for the iPod, including Pac-Man, Zuma, and Tetris.

Now, there are more rumblings that Apple is indeed trying to enter the mainstream gaming sector. Several tech Web sites, including AppleInsider.com, are reporting that Prudential analyst Jesse Tortora believes that iPod games may just be the beginning for Apple.

"We think the video game market represents a distinct possibility for Apple, especially considering that it recently announced the availability of video games for its iPod through its iTunes store," the analyst said in a memo, according to AppleInsider.

The design and function of Apple's recently released and upcoming products make for an easy transition into gaming, says Tortora. "The game console device could be morphed out of some combination of the MacMini and iTV, while the handheld player could be developed as an enhancement to a future version of the widescreen iPod."

Tortora also believes that Apple has hired a slew of game developers for both hardware and software.

But why would Apple risk getting into the gaming business? According to Tortora, to defend its turf. Microsoft's Xbox 360 and Sony's PlayStation 3 are being billed as more than just gaming machines, with downloadable media threatening Apple's iTunes store. By creating a console that also doubles as a media hub, Apple could preserve its position as the leading downloadable media provider.

The proliferation of headlines on the subject made many causal observers think that Apple was considering a move into the console space. However, a closer look showed that Tortora didn't say that the Empire that Jobs Built was going into gaming, all he said was that it might, if it is so inclined. "We think the video game market represents a distinct possibility for Apple," said Tortora. (Emphasis added.)

The official story: Requests for comment from Apple were unanswered as of press time.

Bogus or not bogus?: For now, an Apple gaming machine remains a rumor. Bogus until Apple says otherwise.