[Eug]

This Forbes article quotes John Carmack as saying:

"The iPhone, as a device, is in the same generation power-wise as the PS2 or Xbox," he says. "The graphics are a little lower but the RAM is a lot higher. … You could easily spend $10 million on an iPhone game, but the market just can't support that yet."

That caught me a little off guard, but that does make some sense. Sure, it has no real 3D graphics capability, but the iPhone's Samsung ARM CPU is rumoured to be of the ARM11 class, which is rated at 740 DMIPS at max speed, so let's guesstimate 500+ DMIPS in the iPhone. That would put it in the Pentium II class in terms of speed. (Obviously I'm making wild guesses on limited information, but I think it's an interesting exercise nonetheless. Does anyone have more accurate information?)

So not surprisingly the CPU speed on the iPhone is slower, but memory is a completely different matter. Carmack points out the low memory those older consoles had. If you don't remember, the Xbox only had 64 MB DDR SDRAM (and the PS2 had only 32 MB RDRAM), whereas the iPhone apparently has 128 MB (1 Gbit) DDR SDRAM. Carmack states that having the extra memory really opens things up for gaming development on the iPhone platform.

[Mastrap]

I remember having 96MB of memory on a Performa of some description. I forgotten the title, but it came with a game where you had to take a spaceship into a mine to kill aliens, a doom knock-off basically. It worked flawlessly. So 128 MB is a lot to play with.

[bloodline]

I don't know about you, but I call the PowerVR MBX 3D with OpenGL proper 3D hardware/Software support.

[Graymalkin]

I don't know if the iPhone is exactly PS2/Xbox class in terms of power but it does compare favorably to the Dreamcast. The ARM 1176 in the iPhone supports SIMD and has a floating point coprocessor along with the PowerVR MBX which is based off the PowerVR4 (KYRO line) GPU. In terms of number crunching the iPhone is a pretty capable little device. The main performance limitations will come from heat and battery life concerns, the Dreamcast had a fan to help cool everything off and was plugged into the wall.

Other than that I think Carmack is completely correct. You could spend oodles of money making a badass iPhone game but you're highly unlikely to see a good return on that investment. A game with a $10m budget would need to sell 534k copies at $25 each to simply break even. That's a gold record worth of sales and is extremely unlikely in the existing iPhone market.

While million dollar budgets are still out of the question I don't think that means we won't see truly good iPhone games. There's plenty of power to take advantage of and really interesting control mechanics available.