Mark Rein showed off a playable Unreal Tournament level running on an iPod Touch to the guys at AnandTech last week as an example of Epic Games' commitment to graphical innovation.
Though Epic has not announced any plans to develop mobile games, Rein hinted that consumers might see a playable UE3 game running on the iPhone and other mobile platforms at CES 2010 next week. Unfortunately the mobile Unreal Engine still requires OpenGL ES 2.0, and thus the only Apple smartphone capable of playing such a game is the latest iPhone 3GS. Rein suggested that developers who paid for an Unreal Development Kit license will have access to the mobile graphics tech in the near future, meaning we may see Unreal Engine games on the iPhone and other platforms (like the Motorola Droid) as early as 2010.
The Unreal Tournament demo employs the iPhone accelerometer and an on-screen joystick for player input, but Rein promised that Epic Games is working to develop new control methods for 3D games on mobile phones. Here's a quick video of how the tech demo looks and plays.