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greenmedic88 said:
 

This is why the iPhone is seeing success as a gaming platform.

It's essentially why I play games on mine and I'm pretty sure I don't represent some tiny niche category of iPhone users.

I'd argue it has yet to see a killer app that actually makes someone go out and buy an iPod Touch (buying an iPhone and switching cell carriers is more or less out of the question considering subscription fees, etc. unless an app was so brilliant it was literally revolutionary), but that's not even relevant.

The business model seems to be more along the lines of "the device sells apps by providing a market place" as opposed to "the games sell the device so gamers can play them."

Plus the pricing on most of the games means there are a lot of impulse buys. This will probably change with iPad apps though as they supposedly cost more.

Yeah there aren't any killer apps on the iPhone OS it seems. I have a prepaid cellphone and I pay about $7/month and it's more than enough than I need for air time (I mainly use a landline telephone). So asking me to pay a fortune for a iPhone subscription plan is way out of the question. And the iPhone library isn't good enough to convince me to cough up at least $200 for a iPod Touch (and that's the entry-level version. 2nd Gen 8 GB with no voice control and no mic and remote on the earbuds).

Hypothetically if I had to choose between $200 for a iPod Touch and $170 for a PSP-3000, I would go for the PSP without question. The iPhone OS mostly has these small bite-sized casual games. It has a fully fledged Square-Enix jrpg coming out: Chaos Rings (made by Wild Arms devs) and that is awesome. But the DS and PSP have like how many jrpgs again? And the DS and PSP beat the iPhone OS in pretty much every other genre imaginable. One Square-Enix jrpg + a bunch of casual games does not justify a $200 iPod Touch purchase. What does the iPhone OS do game-wise that the PSP don't? (aside from touch controls? I already own a DS, that did touch control first!) You can sell an iPhone OS to heavy cell phone users who also want fun things to do on the side and you can sell an iPod Touch to people who want a swiss army knife of portable entertainment (music, audiobooks, tv episodes, movies, music videos, pda functions, games, whatever). But you can't sell an iPod Touch on the games alone.

That said the PSP is pretty respectable for non-gaming functions as well. The PSP and iPod Touch both have their benefits, it just depends on taste. If you are a gamer, the PSP is the surefire pick. If you only want to play casual games and care more about the non-gaming features, iPod Touch is better. The PSP can sell itself on its gaming. But the iPod Touch can't.