I did not believe it, but this video demonstration of Street Fighter IV on the iPhone proves that solid controls are possible on touchscreens. This is one of the iPhone’s first truly “serious” games –Street Fighter should be on sale this month for $9.99.

Gamepro’s hands-on demo shows off what on-screen overlay directional pad and button controls are like. I am still skeptical that other touchscreens can match this, since Apple has the most accurate muli-touch displays of all consumer handhelds.

The visuals look pretty sweet, but this is expected from the blazing hardware in the iPhone 3GS. Street Fighter IV on iPhone has only 8 characters though: Abel, Chun Li, Bison, Ryu, Ken, Guile, Dhalsim and Blanka. I hope that other characters can be unlocked with codes and as bonuses.