The new Arduino Esplora has been designed to emulate traditional input devices like a mouse or keyboard, and Arduino has developed to not only be a games controller.

New Arduino Esplora Provides A Ready-For-Gaming, Customizable, Open Source Video Game Controller Darrell Etherington 5:59 AM PST · December 10, 2012 ...

With the new Arduino Leonardo board able to emulate USB keyboards and mice right out of the box, it seems the perfect time for Arduino designers to come up with a proper video game controller.