Amazingly, Apple just set itself up to have a challenger to both the DS casual market and the PSP media market. The DS, because casuals love playing games on cell phones. I mean, who really wants to lug around the DS to play Brain Age if they could just put it on their phone.
Meanwhile, it blows the PSP out of the water in terms of media content.
Of course, hardcore gamers are still going to want PSPs and DSs. Plus, I think big development groups will have to keep in mind that even if the iPhone has 10 million in the marketplace by June, a good chunk of those sales went to people who could not care less about games.
Before any fanboy jumps all over my post, I will post the following disclaimer: I love my iPhone, and I don't own a PSP or DS. I would buy a PSP and a DS in a heartbeat if I still had to commute, but since I work from home now I have had no need to get a handheld gaming device so far.
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