I'm taking such reports with a healthy dose of skepticism, and so are some of my contacts in the iPhone game development business.
According to the rumors, later this year, Apple will introduce a premium game section of the App Store which will feature larger games than are currently available, priced at US$20.
For what it's worth, when I checked with Apple, a spokesperson told me that Apple, in customary fashion, doesn't comment on rumors, so no further information was forthcoming out of Cupertino.
If you're not familiar with the App Store right now, $20 is markedly higher than what games sell for right at the moment. It's not unusual to see new premium games for the iPhone and iPod touch cost $10 or $8, but $5 and less is more the norm. Many of the "shareware"-quality game titles only cost a buck or two.
But it's interesting to note that the "sweet spot" for new premium games has changed since the App Store opened. While you still see some new games from major publishers priced at $10, it's more ordinary to see them priced at $5 or even $8. That sweet spot remains in flux, and it's been creeping back up after bottoming out at a buck or two during the 2008 holiday season.