The iPhone is already touted for its gaming prowess almost endlessly, but it looks like things are about to take a pretty big leap forward. Epic Games has been crackin’ away at an iPhone port of their Unreal Engine 3 — the engine that powers such jaw-droppingly beautiful games as BioShock, Mirror’s Edge, Gears of War 2, and a bunch of others — and they’re now far enough along that they’re looking to show it off.

The first person lucky enough to get some hands-on time with the engine was Anand over at Anandtech, who seems to have walked away impressed. The stuff we’ll see on the iPhone obviously aren’t going to be pixel-for-pixel matches with that found on the current generation of consoles; textures will be downsampled, lighting and shading effectswill be toned down, etc. With that said, it ought to be pretty dang gorgeous.

It’ll still be a while before we see any games powered by the engine. Epic currently has no plans to get into the iPhone space for themselves, though they plan to license the engine some time in the near future. Epic has been been far more aggressive in pricing their engine licensing lately than they have in years prior, going as far as to give it away for free for noncommercial/educational use. Will they keep things cheap for the iPhone variant? We sure hope so.

Lastly: They’re not giving any specifics, but Epic’s also planning on showing off the engine running on a different mobile platform at CES. All things considered, it’s probably not webOS or BlackBerry OS – and that only leaves so many options. Any guesses?

[Via Engadget]