Doom and Quake have been out on WinMo and S60 phones for years. In the meantime the PSP has Rainbow 6: Vegas and Resistance: Retribution.
What screen size did those Phones have?
And what kind of UI and control scheme did they have?
I really don't know, and could be wrong, but I image subpar compared to the iPhone
I have to agree that as far as competeing with the established and dedicated handheld gaming consoles that it will be more of an uphill battle for the iPhone OS. But the delivery model Apple has is superior and cheaper for the developer/ publisher - no mfg / distribution costs. This is, of course, part of the reason for the explosion in small time independent offerings.
And while this makes for more chafe to sift through in the app store - and actually more innovation/ideas, I think it will also put pressure on the big names in development to become more competitive in thier pricing. Because
they will not be able to completely ignore the iPhone gaming market. And that
will be a win win for the handheld gamers.
The iPhone has made inroads into a new market or more effectively tapped a simmering potential market. I'm a good example - I did some light computer gaming before kids. I never would have bought a psp or ds. But I do buy games for my iPhone. And now that my kids are old enough to play games on a handheld and it can be an effective currency as a parent, - Am I considering a ds or psp as a second unit since I have two kids? Nope, I'm thinking iPod Touch. I already bought the games. Why spend more and actually much more per game? In this way the iPhone/iptouch can actually take market share.