I think the A17 Pro iPhones (and likely the M3 devices) could be great gaming devices. The iPhones also support 4k60 HDR output through the USB-C port, meaning you can connect them to a display via a cable and connect up a bluetooth gamepad. The Apple Silicon upscaling solution likely means that you should be able to get an upscaled 1440p image out (the 6.7" iPhone displays have 3.6 million pixels which is about the same as a 1440p display). It would likely be an internal rendering at 900p-1080p. Chuck in ray tracing and I imagine that you are looking at a gaming system around on par with an XBox Series S, but with the versitility of the Switch/Steamdeck (i.e. play portable or docked).
Of course, the one thing it needs are games but offering developers an audience made up of A17/M3 iPhones, iPads, Macs and (potentially) Apple TVs using a common platform might persuade a few more to engage.