"We think the videogame market represents a distinct possibility for Apple, especially considering that it recently announced the availability of videogames for its iPod through its iTunes store. The game console device could be morphed out of some combination of the Mac Mini and iTV, while the handheld player could be developed as an enhancement for a future version of the widescreen iPod," explained the analyst.
Although these claims are not backed up with any hard evidence, the analyst has an interesting point. Apple could make a stand to defend their position in the home entertainment market. Microsoft is now offering TV shows and movies through Xbox Live, something that could affect iTunes business in the long run.
In the other hand, let's not forget how difficult and costly it was for Microsoft to enter the console market. This analyst is obviously overlooking other critical aspects like securing deals with game developers. Apple is not even close of being the behemoth Microsoft is financially, maybe they will prove me wrong, but for now take this as pure speculation.