Apple reckons its high-end iPod Touch can rival dedicated gaming devices like the Nintendo DS and the Sony PSP over the crucial Christmas selling period.
The latest version of its touchscreen iPod, launched over the summer, lets users download games and other pieces of software directly from an online store over a WiFi internet connection.
In the 100 days since it went live, third party developers have created 6,000 applications for the store, including 1,500 games, according to Greg Joswiak, Apple's vice president of iPod marketing.
"The PSP and DS represent the old school of gaming: big bulky devices with an old-fashioned distribution model," he told Newsbeat.
"Selling cartridges is the old school way of doing business. Creating, licensing and manufacturing physical goods is expensive and as a result games are expensive.
"Buying a cartridge for your DS is going to cost £25 but it's a much more efficient model when we go electronic."
A typical full game from Apple's online store costs between £2.99 and £5.99, although hundreds of more basic demo titles are available for free.
Nintendo's portable DS is one of the most popular devices created
"Customers are much more likely to buy more games because they are not such a major investment and you don't have to be motivated to go out to the shops," said Joswiak.
"It creates an upward momentum which is why you have all the big gaming companies like EA, Sega and Hudson creating games for the iPod Touch now."
While Apple dominates the market for music devices, it has never been a powerful player in the gaming industry.
Its desktop machines are widely used for tasks like video editing and publishing, but only boast a handful of games, mainly straight copies of PC titles like World of Warcraft.
Nintendo and Sony, meanwhile, have built up a huge fan base of handheld gamers since the first Gameboy went on sale more than 20 years ago.
Nintendo's portable DS machine is one of the most popular pieces of gaming hardware ever created. 85 million have been sold worldwide, according to the research company VG Chartz.
Apple will have to convince gamers to give up traditional joypad-like controls for the iPod's touchscreen and accelerometer, which measures balance in a similar way to the control mechanism built into Nintendo's Wii console.
"It actually offers developers a lot more control," claims Apple's Greg Joswiak.
The PSP has traditional joypad-like controls, unlike the iPod Touch
"Whatever controls are needed can be painted on the screen itself."
The screen and accelerometer work well for puzzle and driving titles but arcade gamers might be frustrated by the responsiveness of a touchscreen d-pad.
"It's more suited to strategy-type games that are not about quick reactions," said Piers Harding-Rolls, who watches the games industry for the media research group Screen Digest.
'Wait and see'
Rivals like Nintendo and Sony are also starting to experiment with new forms of digital distribution.
A latest version of Nintendo's handheld console, the DSi, due for release in Japan this month and the UK next year, will come with the ability to download games directly from the internet just like Apple's machine.
"The iPod Touch and the iPhone are both interesting propositions but in terms of the quality of games out there, you can't really compare them with the DS and PSP just yet," said Piers Harding-Rolls.
"At the moment it's much more in the mobile gaming bracket in the same way as phone-based games. But Apple has been courting some of the big publishers like EA and Sega, so it's a matter of waiting and seeing what happens further down the line."