iPhone able to compete with PSP and Nintendo DS?

Even before the first games were shown at the App Store, those of us with jailbroken phones were playing with the Super Nintendo emulator (snes4iPhone) downloaded from the trusty Installer application.  We all knew that the iPhone was going to be a big hit, possibly even able to compete with the PSP and the Nintendo DS.  Now others are starting to agree as the quality of the games from the App Store continues to rise.  The Wall Street Journal reports that there may be threat to PSP and Nintendo DS.

Some might think that we have yet to see whether or not the two different markets end up stepping on each others toes, but I say that if the game developers are saying there’s a threat – there really is a threat.  Who would know better than the people that actually make the games?

If this is what the first generation of the iPhone/iPod Touch can do, I can’t imagine what the next version will be like…