http://scrawlfx.com/2008/05/rumors-sony-developing-transformer-controller-video-service-by-e3  

The controller don't actually look like that. That just a toy. But the idea is that you can transform it  to suite different genre, FPS, RPG, etc.

The idea is okay, but I'm sure it will turn out to be shit.

 not really, many people would love the abilty to switch around the D-pad and analog stick.

That's not just a toy, its a transformer. Also, I don't think that type of controller would work to well, and it would probably be a lot more money.

OOOOOOOLD news:

http://www.n4g.com/industrynews/News-134232.aspx

It was part of the 1up podcast over a month ago...thus the 'source' of the EGM rumour in the first place.

This is actually a fantastic idea. No controller is good at everything (crappy PS3 back triggers, 360's worst D-Pad ever, Wii makes racing without a peripheral a joke). So having the ability to have a personalized controller for each genre sounds like a step in the right direction.

Good idea, but my bet is expensive and fragile

Damn! I'm sold! I was on the fence about the PS3 but if there's going to be a controller that turns into a robot I just can't resist! Sign me up!

The problem with this is that it would be very VERY fragile.

That would be a good idea because I actually prefer the 360 controller for shooting games.