By Darren Waters BBC News Online in Los Angeles

Nintendo claims its dual screen device will change gaming

Sony lifted the lid on its Portable Sony PlayStation (PSP), a games console which will also play music and video.

At a separate press conference Nintendo demonstrated its Dual Screen (DS) device, which it promised would "change the games industry".

The mobile games market could be the next battleground with more than 100 million users expected by 2006.

Battle looming

The two firms aim to dominate this next generation of mobile entertainment.

Nintendo is the market leader in mobile gaming and has sold more than 190 million Game Boys world-wide.

PSP is a new format and a new business for us. It is a totally new play experience Kaz Hirai, Sony Computer Entertainment America

It fired a warning to Sony that it would not give up its position without a fight and said the firm would have a difficult time overtaking a market already dominated by its Game Boy Advance console.

"By the time the PSP gets onto the ballot, more than 25 million people will have voted for Game Boy Advance," said Nintendo America's George Harrison, using an electoral metaphor.

Reggie Fils-Aime, Nintendo America's executive vice president of sales and marketing, said the Dual Screen device would not only change Nintendo, it would change the games industry.

"It represents a brand new way for gamers to relate to their games and to each other," he said.

Entertainment on the go

The device has a touch screen which can be controlled via a finger or a stylus and will also feature a microphone for potential voice recognition.

Mr Fils-Aime said the second screen offered games developers new opportunities for their imaginations and talents.

Up to 16 Nintendo DS users can play with and against each other, connected wirelessly.

E3 exhibition provides a showcase for the games industry

Sony billed its new hand-held console as a device for "entertainment on the go".

"It will offer high quality music, movies, games on one central device," said Kaz Hirai, chief executive of Sony Computer Entertainment America.

The PSP will also have wireless connections and will use a new disc based system for games, movies and music, the Universal Media Disc.

Both companies are targeting the core demographic for game players - the 18 to 34-year-olds.

"We know they buy more games with more disposable income," said Mr Hirai, who said almost 100 developers were planning titles on the new machine.

He added: "PSP will enter an already crowded space, but one with much growth opportunities.

"PSP is a new format and a new business for us. It is a totally new play experience."

Mobile gaming is a growing industry - Nokia has launched a hand-held device and there are new mobile consoles such as the Gizmondo expected in the coming 12 months.

Price cut

Nintendo DS due to be in the shops in US and Japan by end 2004

The PSP and Nintendo DS are expected to be released in Japan at the end of the year. Neither company gave any indication of price.

Nintendo said it was also planning to release the DS in the USA at the end of 2004.

Sony also used its press conference to announce a cut in the cost of its PlayStation 2 console in the US to $149.