Apple decision to compete in gaming market is not a new thing. Since the launch of iphone, Apple began to notice that gaming market is a very potential market.
Technically, the difference in technology between iphone and those DS and PSP is minimal, the only difference is the controller, and the software. Because iphone was selling well, Apple didn't need much time to gain a significant installation base. As the result, games began popping at Apple store, which in fact mostly are junks repetitive genre (there are hundreds version of solitaire!).
Nevertheless it was successful business. Bigger game developer began to port their games to iphone and see how they performed. Even Konami made a "duck hunt" version of Metal gear solid 4 exclusively to iphone.
With the announcement of new iphone touch, it will offer gamers a very integrated piece of gaming device. At the presentation Apple boasting that they have 21.178 games available in Apple store compared to 607 games for PSP, and 3.680 games for DS, also cost a lot less than the competitior. $10 for most iphone games, $25- $40 for DS and PSP respectively. In addition to $199 tag price, Apple will seriously challenge Nintendo and Sony.
In the other hand, while having 21.178 games on their store, most of them are crap compared to Nintendo and PSP. In order to compete, Apple must invest in gaming development, more first party title and it will take some time to make up the experience that both Nintendo and Sony had.
Lastly, $199 is for 8 Gb only. Given current generation game size, 8 Gb won't fit many games.
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