Gaming on the iPhone has always been a bit problematic. Though the App Store has a thriving games section, games have always been pretty hit-or-miss.
The biggest obstacle in iPhone gaming is a lack of physical feedback. The iPhone touchscreen acts as the controller for most games, but that can cause a lot of hiccups. One problem that can occur is gamers' figures getting in the way of the action. Other times the touchscreen just doesn't register players commands, and in the heat of battle that can mean life or the game over screen.
One way Apple could solve this problem is with a shoulder button. That's what one Bitmob blogger thought he spotted on some rumored iPhone5 photo leaks. If Apple did add the button it would vastly improve the iPhone gaming viability. The shoulder button would solve a lot of problems for certain games like the iPhone version of Battlefield: Bad Company 2.
First person shooters (FPS) like Battlefield can be pretty hard to play on the iPhone compared to the console gaming perspective. Moving your character on the iPhone is awkward. Aiming and shooting can also be a rather difficult task. But with just one shoulder button many of those problems could go away.
However, with Apple's minimalist design philosophy I doubt they would add in a button meant solely for gaming. The button would have to have much more functionality built into it for Apple to justify its inclusion.
Other games can solve this problem by using the iPhone gyroscope. Games like Galaxy on Fire use the gyroscope to effectively control in-game spaceships or car. But that can lead to some awkward angles and a loss of screen visibility.
A new and improved iPhone 5 screen may afford viewers to see the action better at more extreme angles. If that was the case it would definitely be an improvement, but it isn't the silver bullet needed to fix gaming on the iPhone.
The iPhone 5 is also due for a power upgrade. The rumors are the new iPhone will have 1GB of RAM and Imagination's PowerVR GX543 graphics silicon chip. That's the same graphics chip in the iPad 2. Apple hasn't officially announced how much RAM the iPad 2 has, but Internet sources put it at 512 MB.
If the predictions are right, then games will run much smoother on the iPhone 5 since it will have double the RAM of the iPhone 4 and the iPad 2.
One of the most popular handheld gaming devices around is Nintendo's 3DS. It features a clamshell design with two screens (one of them a touch screen with a stylist), a joystick, D-pad, four front buttons and two shoulder buttons. It also has truly 3-D capability, though it can be a strain on the eyes. Good thing Nintendo lets players turn off the 3-D.
Nintendo has been the dominant handheld gaming force ever since the Game Boy back in the 90's.
If Apple wants the title of handheld gaming champion they will have to add some real buttons to the iPhone5. Physical feedback is a necessary part of good gaming and the touchscreen just doesn't do the job.
However, maybe the thing that is really necessary is for developers to recognize the limitations of the iPhone. Not all games work on the iPhone; FPS are just too awkward to be played. Nonetheless, there are some truly great games on the iPhone, like Angry Birds, and they work well because they know what the iPhone physics inside out.