Here's proof that the iPhone truly needs a genuine external game controller. The video shows the iJoyPad used to play Wipeout XL and Ridge Racer by way of the psx4iphone emulator. And no, there doesn't seem to be any sound on the video, thanks for asking.
[Via Engadget]
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Why took so long to come out something like this?
Don’t we have bluetooth game controller?
Why not port those to iPhone?
That would be a super cool PSP/DSi/or alike.