The iphone is actually 3.6" diagonal widescreen and is about the size of a PSP screen and bigger than a DS screen. Plus the multi-touch display control (not just tapping... swipping, zooming in/out, pinching, dragging, etc), acelleromters (like Wii), built in Wifi (with ad-hoc), bluetooth stereo, 3G, 256Mb RAM (PSP 64), Shader Support SM2.0 and OpenGL 2.0 support(PowerVR SGX), 600mhz ARM A8 Cortex processor, 3rd party controller support coming via port (OS3.0), over 50,000+ apps/games, 40,000,0000+ ipod Touch/iphone/iphone3G/iphone3GS units, big developer support (EA,Namco,THQ,Gameloft,Konami,ID,etc). Only a fool would rule out the iphone/ipod are not gaming devices and already have great games w/ great control schemes.