[citation][nom]smlong426[/nom]I'm not seeing it. An Xbox360 arcade for $150 will run circles around this thing and already provides more capabilities, features, inputs, etc etc.[/citation]
First of all, you're missing the fact that an Xbox 360 Arcade has virtually no built-in storage for media files, and it's still a Microsoft product that costs more than the comparable Apple product. That never happens.
Secondly, it would take nothing for Apple to release game controllers that utilize the iPhone's built-in bluetooth. Not to mention the games that are currently available for iPad probably would look decent at 480p upconverted.
Thirdly, find me a new Xbox 360 Arcade for $150. Or $99 for that matter.