Is the iPod's future in gaming ?

The rumour has it that the iPod's next major move is to morph into a portable playstation. Apple is allegedly recruiting C/C++ developpers with experience in the field of video game.
Indeed it would be a clever way to stand out in the iPod like arena.
Wouldn't it be great if Apple eventually had a "Game" department, like Microsoft? Then they would be able to fill in the gaps and give a boost to the dying market of Mac games.