Those big budget games also cost a gagillion dollars to make. My buddy worked at EA for a year. He would tell me stories of how they can spend over $50 million on a game and it makes $52 million worldwide. And EA is a billion dollar company. They consider that at best a break-even game and possibly a loser.

That same buddy now works at Microsoft. Do you realize that MS doesn't make money on hardware, on the xbox units themselves? I think they just started breaking even on the hardware in the last few months with that. That's 6 years of a top-selling product that they have lost money on. Meanwhile, they make something like $1.5 billion a year just on Xbox Live subscriptions, and more money on the licensing fees for games. I don't have any numbers for that.

Now also consider, as of April 2010 MS had sold 40 million Xbox 360's (http://kotaku.com/#!5522559/xbox-360-40-million-sold). That's over the course of 5 years. Meanwhile, Apple has sold at least 50 million iPhones in 2010 (http://www.macstories.net/news/47-million-iphones-sold-in-20...), 15 million iPads in its first year (http://www.apple.com/pr/library/2010/07/20results.html) and another 1 million iPad 2s in its first week.

There have been 47.9 million Playstation 3's sold since November 2006 (http://www.scei.co.jp/corporate/data/bizdataps3_sale_e.html). Taken separately, the 2 popular consoles have taken 5-6 years to rival the number of units sold by Apple in a little over a year. If we take into account the number of iPhones and iPod Touches sold in previous years, its a safe comparison to say that Apple alone has an equal or larger number of units sold compared to consoles, at least in shear numbers. To top that off, estimates are that iPads alone will push 50 million by the end of the year, and who knows how many iPhone 5's will sell when it launches.

So the market almost always wins. Developers go where the money is. On the one hand you have the existing console market that has, for the sake of argument, 100 million units worldwide. On the other, you have the iOS combined platform of roughly the same or more number of shear units.

Consoles:

1) Expensive games ~$60 USD

2) Locked into your house. e.g. You can only play in front of your tv.

3) Limited utility, games, movies
4) Better controls for first person shooters. Crappy controls for Angry birds.

5) Amazing, if expensive, graphics. Sometimes. In fact, lots of $60 games kind of look like crap.

iOS (iPhones, iPads, iPod touches):

1) Inexpensive games $0.99-$10 (averages)

2) Portable. Can take it anywhere

3) Lots of utility. Phone calls, text messages, games, camera, video, GPS, shopping, movies, music, etc.

4) Crappy controls for first person shooters. Perfect controls for Angry Birds.

5) Median graphics. Not Crysis or Farcry level. But high-level of quality control and the best games look pretty good.

There's a lot of other reasons I can go into, but basically I'm trying to demonstrate that "better controls" have nothing to do with it. Better graphics have little to do with it. You can buy like 10-20 games on your iPhone and/or iPad instead of 1 game on your xbox or playstation. And you can take them with you anywhere. And the market is a hell of a lot bigger, so you can sell more $5 games than you can $50 games.

1) Its cheaper to develop for iPhones/iPads/Android devices than consoles

2) There's more iPhones/iPads/Androids out there to sell to. Lots of people that aren't interested in consoles buy smart phones and tablets. Everyone loves to play games.

3) MUCH lower barrier to entry to make apps and games for iOS and Android then Xbox or Playstation.