I love video games (already noted) and I follow the industry extensively.
A few days ago I posted about eBooks and how they are causing a scared uproar in the industry, especially for publishing houses. Well, you can see this same thing going on now in the video game industry.
I enjoyed that article, even if it is extremely skewed because Nintendo is essentially presenting on how upset they are that the iPod/iPhone/iPad are stealing their business. Their worry is that people would willingly pay $1 for an underpriced, slightly inferior product rather than $35 for a more polished, retail game mimics many worries stated by full time publishers (that cheap, $1 ebooks will dwarf full retail paper copies at ~$15).
The thing in both instances is that the market isn't going to swing entirely one way, it's going to just level out. Someone mentioned that it's like a Ven diagram. You have the people who always and only buy retail copies of games on one side, and the people who always and only buy cheap iPhone like games. The thing is, the overlap is enormous. People buy BOTH.
The same applies to ebooks if you consider publishing house sponsored ebooks vs $1 kindle indie store books. People buy both. Sometimes I just want to play an easy, good game. So I throw down $1 and buy an indie game on iPod, Xbox's Indie Channel, or Steam. It isn't usually a fantastic experience, but I get my $1 out of it and that's fine.
The same goes for indie books. I tend to skim a few, usually enjoying them because they can be braver on ideas and perhaps not share the quality of a higher end book, but for $1 I got my experience worth.
However, I'm never going to say a $1 indie game is even close to the same caliber of Dead Space 2. Just like I'm never going to say that a $1 indie book is even close to the same caliber of Wise Man's Fear. It isn't stealing, it's overlapping. People who read will read both. People who own ereader devices are avid readers. They aren't going to stop buying big-name ebooks. They are just snatching up the cheap ones because they consume books at the rate of one a day, and a cheaper alternative to fuel that addiction (especially since there is no "library" to check-out ebooks for free) is to snatch up $1 throw-away eBooks.
I'm not saying everything on the kindle indie store is bad, far from it. I'm just saying the mentality is completely different. People freak out because of how well iPhone games sell (or certain indie books) but think about it. It's $1. Your expectations are lower. The price of entry is lower. You are selling the Kindle edition of Wise Man's Fear for only FIFTY CENTS LESS THAN A BOUND HARDCOVER COPY. At $15, that means I can technically test out FIFTEEN indie books, gamble my money away, and if one or two of those is extremely satisfying I ended up better off. Consider it.
Anyway, I like video games, and I found that article interesting. What is also interesting is that we have conventions where people like large publishers or Nintendo get up and lament about themselves, but you never hear from indie publishers because they can't carry the weight.
Plus, most of them are still out making games/writing books and adapting to the market rather than complaining about it.