In what is likely to be a landmark news announcement for mobile gaming developers, Epic has announced that its latest version of Unreal Engine 3 works on the Apple iPhone.

The Gears of War and Unreal Tournament developer has not announced any specific games for the iPhone platform as yet, although it is only a matter of time before we hear more on that front.

For now, it is a good enough early Christmas present to iPhone owners to simply know that Epic's development tech runs smoothly on the Apple smartphone, which is increasingly becoming the hardcore gamer's handheld of choice.

More to come at CES 2010

Epic CEO Mark Rein showcased Unreal Engine 3 running on a third generation iPod touch – amazingly, this is the same engine that powers Gears of War 2. Rein teases us with the expectation of more to come at CES in Vegas early next month.

"The demo is both playable and has a flythrough," notes AnandTech. "It's using a modified Unreal Tournament level previously shown off at GDC.

"A virtual thumbstick on the left side of the screen controls your movement, while tracking your thumb in the lower right corner of the screen controls the camera. Just tap the screen to shoot. Mark said this is a tech test bed and they're experimenting with several different control schemes including ones with tilt."

Via CVG