Taking the Game War To a Second Front

A man in dark jeans and a Super Mario T-shirt slipped behind a pillar on the upper floor of Nintendo's 42,000-square-foot outpost at the Electronic Entertainment Expo, the giant annual video-game trade show also known as E3. Unseen, he made his presence known with a handwritten message zapped onto an unusual new hand-held gaming system called the Nintendo DS.

''I'm Shigeru Miyamoto,'' he wrote with a stylus on the lower screen of his DS, a clamshell two-screen gaming device shaped like an inch-thick checkbook. The words appeared on the top screen of a second DS, whose user scribbled an electronic reply.

Mr. Miyamoto, Japan's most renowned game designer and Nintendo's senior managing director, has been communicating with Western audiences through video games since 1981, when he conceived the arcade game Donkey Kong. Now 51, he has also created Nintendo icons like Mario, Luigi and Zelda and directed the best sellers Super Mario Brothers 3 (1989) and The Legend of Zelda: The Ocarina of Time (1998), hailed in the video-game press as among the greatest games ever.

As E3 unfolds here this week, his mission is to convince the industry and its followers -- including the designers and publishers Nintendo hopes to recruit to create games for its new machine -- that what players need next is a device with two screens.

It may be a challenge. Many in this audience wonder if Nintendo's house of ideas can withstand a steamrolling Sony, which is using the trade show to unveil its own hand-held game device, the PlayStation Portable. The Sony entry, known as the PSP, plays games, movies and music and has been billed by its corporate parent as the Walkman of the 21st century.

The PlayStation Portable is another volley in Sony's decadelong effort to best Nintendo, having first removed it from its position as the market leader in home video-game consoles. Now it is seeking to knock it from its perch atop the hand-held market: Nintendo enjoys near-total control in what Jupiter Research estimates is a $1.6 billion hand-held business that includes the Game Boy Advance.

By year's end, the DS (under a name yet to be announced) will join the hand-held ranks; the Sony PSP will arrive in Japan late this year and in North America and Europe in early 2005.

Nintendo's president, Satoru Iwata, 44, said the company was already working on a new hand-held when the Sony PSP was announced a year ago, but that Sony's move stimulated his developers' creativity. ''I think it has triggered great motivation'' among Nintendo's developers, he said through a translator -- so much so ''that they really have to come up with great changes in their games.''

The DS's unusual design took shape a year ago after a visit from a former Nintendo president, Hiroshi Yamauchi, an outspoken 50-year veteran of the company, who reviewed the efforts of hardware design teams to create a new hand-held game machine.

''Basically we were all focused on bigger, faster,'' Mr. Miyamoto said through a translator. ''And then Mr. Yamauchi came down and said: 'Knock it off. We want something unique, something brand new. Do something on two screens.'''

That directive was a classic Nintendo move, according to P.J. McNealy, an analyst for American Technology Research, who said the company has long been known to skimp on technology in favor of focusing on finding unexpected ways to change game play.

Mr. McNealy said the need for that strategy had intensified as Nintendo faced stiff competition from richer companies like Sony and Microsoft. ''Nintendo has to keep up by either being more creative at a cheaper price or investing more money,'' he said. ''The DS is a good example of creativity while not breaking the budget.''

The company's games-first philosophy has led Nintendo, unlike its competitors, to exclude options like DVD playback from its home consoles. It also led to its current approach of searching for new ways to excite gamers. Mr. Iwata said that a recent slowdown in the Japanese game market indicated that simply improving graphical capabilities, the usual approach, would not attract consumers. ''People in the industry are looking forward to some kind of sea change,'' Mr. Iwata said.

Mr. Miyamoto agreed, suggesting that a focus on technology would limit creativity. He is undeterred by estimates that the Sony PSP's bigger, higher-definition single screen can exhibit graphics on par with the current-generation PlayStation 2, or that the graphics of the Nintendo DS, while far superior to those on the Game Boy Advance, are closer to those seen in the higher-end last-generation Nintendo 64 games. ''We weren't trying to create the next PSP,'' he said. ''We were trying to create something you hadn't seen before.''

And Mr. Miyamoto knows something about innovation. He helped to popularize side-scrollers, which expanded a video game's landscape beyond the width of a single fixed screen, in 1985, and he taught players how to move in three-dimensional space with Super Mario 64 in 1996. While the most obvious innovations of the DS -- touch screens and a visual display across multiple screens -- are not cutting-edge, they are unexplored in video games. Still, they may not be easy to sell on the theoretical level.

''At the beginning there was a collective, 'What the heck?''' said Kevin Ray, the chief technical officer of Majesco, a prominent Game Boy publisher whose company is now working on DS games and who has since been won over. When Will Kassoy, vice president for global brand management at Activision, which will also create games for the DS, found Nintendo fans speculating online that two screens might allow a game to depict a character from a third-person perspective in one screen and a first-person perspective in another, he wondered how people could play that way.

Mr. Miyamoto's demonstrations at E3 alleviate the confusion. In some, the second screen provides room for a map or other supplemental information that might have fit on a TV screen but would have cluttered a hand-held view. In many cases, the lower screen becomes a touch-sensitive control interface, adopting the interactive image of a xylophone or submarine control panel.

The ideas vary widely. In one demonstration, a stylus is used to ''carve'' a spinning watermelon; in one created by the publisher Namco, players can draw Pac-Man and then direct their careening Pac-Man doodle to eat his ghostly opponents.

The features, which also include voice-recognition technology and a wireless connection to as many as 16 other DS units (or, in a Nintendo first, a Wi-Fi link to the PC), have attracted more than 100 developers, Mr. Iwata said. In addition, the DS will play Game Boy Advance cartridges and its own.

Atari's chief executive, Bruno Bonnell, said that working on the DS is ''like moving from a car to a train -- it's really a new way of traveling in interactive space.'' He said the shift would harness the increasing ability of video-game players to consume and synthesize data. ''I believe we are just escalating what I call the skill of the mutant boys,'' he said, ''which is the capacity of the kids tomorrow to analyze what's going on in multiple screens in real time.''

Mr. Miyamoto said he hoped that the DS would also appeal to those intimidated by modern game controllers and alienated by games that require the button-pushing skills of longtime players. While the DS does include a traditional button interface, he said, its touch screen is so different that ''this is a chance for us to bring everybody back and put them all at the starting line again.''

The question is whether the DS will give Nintendo the arsenal it needs to withstand the Sony PSP's assault. The hand-held market -- which is to say, the Game Boy market -- is primarily made up of Pokemon-playing children and Tetris-loving adults. In a survey of 5,000 teenagers and adults conducted by Jupiter Research last year, only one-third of hand-held owners were 18 to 34, an age bracket that accounts for more than half of the ownership of the home console leader, Sony's PlayStation 2. That missing 18-to-34 audience on the hand-held is the PSP's ''primary target,'' said Kaz Hirai, president and chief executive of Sony Computer Entertainment America.

Mr. Ray of Majesco said the dual screens of Nintendo's machine could open the portable market to more sophisticated games and advance the age of the typical Nintendo hand-held owner, yet Sony is hoping to capture that prospective 18-to-34 hand-held owner all at once with the PSP. Sony entered and took the lead in the console market in the mid-1990's by going after older users and by wooing developers with a pioneering CD-based format that made it cheaper and easier to create games. Sony's entry into the market with the disc-based PSP is an attempt to repeat that history.

Backbone Entertainment's senior producer, Chris Charla, who is intrigued by the DS but is working on the PSP's first announced title, Death Jr., expects Sony's technology-first approach to impose its own sea change on the industry. He said that the PSP's PS2 graphical quality and the lower development costs of a hand-held would enable developers to do console-quality work on a hand-held budget.

''Up until now, if you wanted to make a top-quality game, you had to spend top-quality money,'' he said. ''You could never do, for lack of a better example, 'My Big Fat Greek Wedding' on a video game system.''

Still, Mr. Miyamoto says he is confident that the Nintendo DS's innovative features will assure the machine's success, though he is not without regrets.

Nintendo has diligently marketed each rendition of the Game Boy at or below a mass-market price of $99 and, while not announcing a price at the trade show, indicated that the DS would be value-priced. (Mr. Iwata said the cost would be under $200.)

To keep costs down, Mr. Miyamoto said, some features were left out of the DS. Maybe next time, he said, he will be able to include a tilt sensor for gyroscopic control. For now, he is focused on double screens.