The amount of money they say goes back to the developer on a standard DS game does not seem like it is all profit to me. For one thing they have to pay for the cartridges and the packaging that they would not need for an i-pod game. Maybe the "big players" aren't going to look at the i-phone as a gaming device right away, but that doesn't mean that the i-phone it's self can't create new"big players".
Oh, and in case you missed it 3-D realms has a nice looking title out called Prey Invasion. Even if they can't get that one game done (ever) I still consider 3-D realms a "big player" and if you want to see the game head over to their website 3drealms.com.
All that being said neither the ipod nor the iphone will ever replace my DS, however that does not mean it is not a big gaming device. (PSP will never replace my DS either).
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