Apple's announcement of the iPhone has changed a lot of things: it is a device that has the potential to strike terror into the hearts of all electronics and gaming companies. The iPhone comes with features that a PSP owner would die for: a gorgeous 480x320 display, with 2MP camera, Bluetooth, OS X, iTunes video and music, and up to 8GB of storage (oh yeah, it makes phone calls too). All in a profile that fits in less than 12mm. It has the potential to change gaming, as explained by Joystiq. With its dual touch screen, PS3-styled accelerometer, and Internet capabilities, this device can do seemingly everything that the PSP and DS can do. But, will its high PS3-styled price scare off consumers? $600 including a 2-year contract with Cingular is a mighty price to swallow. The PSP at $200 (not including memory) seems like a bargain compared to this device. Although the iPhone is a phone, and not a gaming machine, it will certainly compete against the PSP, especially as a multimedia device.
Microsoft also announced that it will enter the portable games market with its Zune, however PSP fans should have nothing to worry about. The games will be comparable to the games available on iTunes ... and the Zune's install base is nothing to write home about. If Microsoft were serious about portable games, they'll show off something far more impressive than today's announcement. However, it's clear that the portable gaming battle is no longer going to stay as a simple two-sided battle: Apple and Microsoft will both make things a bit more complicated.
