—The iPhone is expanding the mobile-gaming market: Apple (NSDQ: AAPL) has sold more than 17 million iPhones worldwide, so there’s no need for people to buy another device like a PSP or Nintendo DS. The user base runs the gamut from tech-savvy teens to business executives, which means a greater interest in a wider variety of games. And they’re also ravenous for apps: people have downloaded more than 800 million apps in the eight months the App Store has been open.

—The open platform is a game developer’s dream: Apple’s basic developer kit costs $99, meaning individual publishers can quickly create a game, get it into the App store and scale it out on their own. There’s no need to jump through the hoops that have historically made creating games for companies like Sony (NYSE: SNE) and Nintendo more difficult. That’s partly what has enabled startups like Tokyo-based Genkii to turn a simple feature, like enabling Second Life users to send IMs to each other through the iPhone, into the potential for a standalone iPhone-based virtual world—complete with avatars, virtual currency and streaming audio (via TechCrunch).

But the iPhone has limitations as a gaming device, just like the Wii (or the Xbox 360 or PS3, for that matter): The low barrier to entry means that lazy developers can quickly put out poorly functioning games—and if iPhone owners pay for one too many disappointing game apps, they’ll stop buying. There’s also too much clutter: with more than 25,000 apps, even very good games may find it hard to get noticed (without the bump of being featured in an iPhone commercial).

So, whether the iPhone will evolve into a gaming platform that ultimately overtakes the Wii is still up in the air, but it’s clear that Nintendo (and even Sony) have taken notice: both companies are pushing game downloads as the next hot thing for their portable gaming devices now, with new announcements expected to roll out over the next few days at GDC.

I’ll be at GDC from Tuesday through Thursday, so feel free to email me @ tameka [at] paidcontent.org if you’re there—or if you have any pressing questions that you want game-industry execs to try to answer.