Seriously, I believe the iPhone will have a major impact on the gaming industry. It has the power of the PSP and DS combined but with GPS, Internet Connection, Bluetooth, Camera, and motion sensor built in. We are likely to see games in the future that will utilize these functions in ways that we have never seen before. Imagine games that use the GPS to locate other players and tagging them with the camera. The accelerometer on the iPhone is very smooth from the games I've tried so far. There are already big game industry players who are devoting major resources to develop for the iPhone platform.
One key to the future potential success is not just the great hardware but the delivery method which will likely disrupt the standard model. Game companies can bypass the normal retail channels and publishers by going direct through iTunes and be able to keep more profit rather than fight for shelf space at Best Buys. Being able to download apps and games right into the iPhone is an amazing way to get instant gratification.
I came from years in the games industry and I have not seen something with this kind of potential in a very long time. Sorry Gene. Maybe I should have posted this on the Mac Night Owl forums.