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@Galaki
That's true, most of the current games won't be easily portable to the iPhone, or at least not in such a way that the end result is actually playable and enjoyable.

@shams
Maybe so, but both Sony and Nintendo run the risk of upsetting their current distribution channels if they really step up to the online distribution. That's a risk that Apple doesn't have, being completely outside the gaming market. Also, the iPhone comes with loads of internal storage space which is a definite advantage over PSP and DS.

@Munkeh111
I don't know about that, but obviously it is a problem with motion sensing. But the games are not going to rely on the motion sensor as their only means of input, that's for sure.

@famousringo
Well, one part of the money is in the hardware sales and the operator contracts. With the price cut and the App Store and all the developer support Apple is giving, they are really pushing the iPhone to new markets. And I suspect they are actually making some profit from the App Store as they already have all the infrastructure in place.