The Finnish phone giant has unveiled plans for a phone that doubles as a handheld games console.

Nokia is planning to create its own games for the N-Gage device that will also run versions of already established titles published by game makers such as Sega.

In making the N-Gage, Nokia will be taking on handheld games giant Nintendo and its hugely popular Gameboy.

Game gear

The N-Gage handset is due to be released in February 2003 and will play games supplied on memory cards that plug into a slot on its side.

Nokia is aiming at the Gameboy market

Some of the titles for the N-Gage will be made by Japanese software firm Sega, most famous for the Sonic the Hedgehog series of games.

Many mobile phone firms are betting that games will help them squeeze more cash out of their customers by upgrading their handsets and using new multimedia services.

Operators, such as O2, and some independent firms, such as Masabi, already let customers with the right phones download games to their handset.

Many newer handsets use software called Java that makes it easy to create programs small enough to download over the airwaves into a mobile.

Game on

Although the games on handsets are steadily improving, they are not as sophisticated as those found on dedicated handheld consoles such as Nintendo's Gameboy.

Sega making games for the N-Gage

This is despite the fact that beneath the hood both the Gameboy Advance and many Nokia phones use microprocessors from the same company, Arm.

The Gameboy is better at running games because it is a single function device, has a bigger memory and because any title played developed for it only has to be converted to work with a single set of specifications.

By contrast any games company that wants its releases playable on phones must re-work them to fit the screen sizes, memory and keyboard combinations of many different handsets

With the N-Gage Nokia is hoping to remove some of this diversity and give game makers a better reason to put titles on phones.

But it will face a tough task overturning Nintendo's dominance in handheld games players. In 2002 Nintendo hopes to sell 15 million of its Gameboy Advance.