Canadian developer IUGO Mobile Entertainment is showing off an awesome first-person shooter for iPhone at the BREW 2008 conference in San Diego.

It's called Re-Volt, and it blends Quake-style graphics with iPhone's touchscreen and motion-sensing capabilities, to stunning effect.

I got hands on with it tonight at the show. You tilt the iPhone back and forward to move your character forward, and left and right to strafe. Shooting is automatic, although you can tap the screen to auto-aim at an enemy.

It took me a couple of seconds to acclimatise, but once I did, the game was smooth to play – the controls felt intuitive pretty quickly. It could be an iPhone hit, for sure.

I apologise for the blurriness and dodgy reflections on the following video, which I shot on the stand. The game itself is sharp as a button, and IUGO have promised to send us some proper video footage next week. But this should give you a taster:

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IUGO isn't sure yet whether it'll try to release the game itself through iTunes when Apple launches its application store, or distribute it through an established publisher. The engine could even have an existing brand attached to it, in theory. Meanwhile, IUGO also has a sandbox app for iPhone showing a bunch of cogs and objects bouncing round the screen - again, controlled via a mixture of touchscreen and tilting. "The touch and the accelerometer really opens up a lot of opportunities for innovative gaming," CEO Hong-Yee Wong told me. "We've been really impressed with the iPhone. The tilt is really sensitive, and you can get precise movement using it." Watch this space: if plans for Re-Volt to be launched as a full iPhone game come together, we'll tell you about it as soon as we know.