It is cheaper and more convenient to just buy the game with the current hardware they have or accelerate upgrading from what they currently use.
Is it though? A Nintendo Switch at its cheapest most portable model costs $199. And games can be bought on sale quite often. In terms of gaming alone, a Switch pays for itself compared to buying an iPhone and titles on the APP store (e.g. buying full priced games like RE: Village for $79.99).
It is a triple-A title that costs different as well. It must cost more to develop than say Candy Crush.
RE4 Remake (which only released this year) has universal purchase and it's a complete remake of the original not simply a remaster. So that point is moot.
We are in day 10 of any Apple device with ray tracing. Let us have this conversation again by year 5.
I'm talking about software support for developers. Apple's chips have been powerful and capable for years with some AAA titles like Alien: Isolation on iOS. But AAA gaming is the exception not the rule for mobile gaming (although that has changed recently with some titles like Fortnite and Genshin).
Despite iPhones being significantly more powerful than even a Nintendo Switch, game titles have
not been ported over. Ray tracing is extremely impressive, but pointless if Apple can't convince more studios to port their games in the first place.
"Let us have this conversation again by year 5."
Sure. But you could have said the exact same thing in 2017 when the Switch launched (also a mobile processor powered device that was underpowered compared to the iPhone) and yet 6 years later we only have a handful of AAA titles.
Apple & Google are not after users who would snub the iPhone & Android as a triple-A machine. They're both after the user profile who bought into the Nintendo Wii that are least likely to buy a PlayStation or Xbox. IIRC gaming PC, Xbox & Playstation users mocked how weak the 480p graphics were. But Nintendo made a good margin for every Wii sold + games. Business model for Xbox & Playstation is that their hardware is sold at a loss in the hopes that the gamer will buy more than 1 game during the 1st year of ownership.
At the of the day what Tim Cook & Sundar Pichai is market share and revenue. No iPhone or Android phone I know is sold at a loss in hopes for App Store or Play Store purchases. Very Nintendo business model that actually makes money in spite of not being ranked #1 in market share.
As market share and units sold erodes over time both Google and Apple will finally address the concerns of the last hold outs after 5 years.
This last section is a bit unclear to me.
But regardless, market share and revenue isn't everything. The iOS App Store is the biggest gaming* platform on the planet in revenue.
The asterisk here and point of contention is that most of that revenue comes from micro transactions-based games and not from AAA titles. The quantity (revenue) is there but the quality (AAA and "full-fledged" games) isn't.
The iPhone (and soon equivalent Android phones) have been gaming beasts for
years now. But the problem isn't in the hardware, it's whether playing on a phone is actually viable for AAA games long term.
Even in markets where mobile gaming is huge, the field seems mostly dominated by a few titles/genres (MOBAs, battle Royale shooters, and puzzle games).
There could be something fundamental about the nature of phones being touchscreen based that affects or adoption, or perhaps it's simply the gaming ecosystem on mobile. Regardless, we've seen the arguments you've made for several years now and not much has changed.
For the former point, if the iPhone were "dockable" or the A17 Pro chip put in an Apple TV for example, then I think there's an opportunity there for Apple. But otherwise, I see AAA gaming on iPhone being niche for a while.