This is a curious argument to make. The platform is too popular? Would it have made any sense at all if anyone made the same claim about, say, Windows game development?
I suspect what this really means is "there are more games than ever, and the iOS App Store is becoming increasingly difficult to rely on as a discovery mechanism, thus requiring advertising to users with other mediums", but that's kind of always been true, and it's certainly been true of all desktop platforms. Which makes me wonder why iOS can't simply be treated the same way non-mobile platforms are and rely on more traditional marketing channels?
The only other way to interpret this that I can think of is "it's becoming increasingly difficult to justify a >$5 price for a game", but I haven't seen any sign of that being true. iOS has had a "race to the bottom" mentality for prices since the app store first opened. There's always been a ton of free or $0.99 games, and a relatively low number of pricer-but-higher-quality games. I don't think this has changed in years, with perhaps the only real difference being that game developers are becoming increasingly sophisticated about how they apply F2P techniques. And as a bit of anecdata, the most impressive game I've seen on iOS in a while is a brand new one called Implosion that costs $9.99 and, at the time of this comment, has a solid 5-star rating with 311 reviews.