Quote: "but people tend not to play much on phones these days."
You couldn't be further from the truth! I know it's quite hard to accept when you look at the quality of lots of mobile games, but the mobile game industry is absolutely massive. We're talking $$ billions $$ per year.
One company alone (www.zed.com) pushed out games to 160 million people last year (which is probably why they alone turned over half a billion $ in 2007, $100 million of which was pure profit).
Trust me - it's way bigger than you realise! the Android Game Creator is just a 3 month prototype to enter in the Google competition, and if they win they'll go into the next round and get to update it further. Yes it will be T3DGMish in nature, but this is a Ravey built project, so expect some seriously good hardcore retro gaming action possible from it