They will increasingly target the phone arena, as handheld consoles die out. They are losing market share at a breathtaking pace and this is bad news for hand held console gamers, but good news for people who don't have one but still would like to play something decent.
Changing hardware is a problem, it's the problem that PCs have had for years, though PC games have continued to exist. The problem in fact is quite limited for the iphone. There are dozens if not hundreds of various android phones and targeting them all isn't easy, but only 2-3 contemporary iphones (5, 4s, maybe the 4), so building for them must be easier. And other than resolution they share hardware with the ipad.