With software buzz focused squarely on sequels (such as Bungie Studio’s Halo 2 and Square Enix’s Final Fantasy XII), most of the real innovation at this year’s E3 came from the hardware side of the business. Both Sony and Nintendo unveiled new mobile systems, while two new consoles – Infinium’s Phantom and Tiger Telematics’ Gizmondo – are getting ready to try and steal some market share away from the big three. Although spec info on third-generation consoles was conspicuously absent at the show, Sony, Microsoft and Nintendo did throw a bone to gamers by launching new gadgets and applications for existing systems.

Sony offered a first peek at its PlayStation Portable (PSP) handheld gaming system, which features a 16×9-centimeter panel and is capable of playing full-color 3-D games, movies and music – just like the PS2. The system is also compatible with peripherals such as the EyeToy and houses GPS and Wi-Fi wireless play capabilities. Along with a USB port, the PSP uses universal media disks that have 1.8 gigabytes of memory. The console will be available in Japan in November, followed by European and North American releases in March 2005.

Nintendo is definitely not ready to give up its handheld crown without a fight, countering with its own new DS system. Launching in Q4, the platform’s bottom half features a touch-sensitive screen that can be activated with a stylus to control gameplay on the screen’s top half. In Namco’s Pac Pix, for example, players draw a Pac-Man that comes to life and moves where players draw lines. The Nintendo DS has voice recognition technology and Bluetooth and Wi-Fi for multiplayer games, and it plays existing Game Boy Advance cartridges and videos. Gamers can also use Picto Chat software to send text and picture messages.

As for the third member of the console triumvirate, Microsoft chose to focus on souping up its Xbox Live on-line service, signing a deal with developer Electronic Arts and adding video chat, voice messaging and level placement functions to encourage its million-strong customer base to form on-line communities. The company is also trying to shake its reputation as an adult-focused console, showcasing 20 to 30 new kid-friendly games this year, including Activision’s Shrek 2 and Konami’s Yu-Gi-Oh! The Dawn of Destiny.

Amidst much industry speculation, Infinium Lab’s Phantom platform finally appeared in the flesh (so to speak). Billed as a gaming service rather than a console, the Phantom gives subscribers broadband access to a library of titles for a monthly fee of US$29.95. Individual premium games can be purchased permanently or for a three- to five-day play window. Infinium will be announcing its software partners later this year, but the list should include publishers of both PC and console titles.

Phantom games take from five to 15 minutes to download, and players can peruse reviews or manuals and discuss the game in chatrooms while they wait. The menu is divided into two sides, with a passworded parent area where ordering takes place, and a colorful but stripped-down kids area. For Phantom’s November launch, Infinium is planning to ape the mobile phone pricing model in which the US$199 console purchase price is waived with a two-year contract.

And throwing its hat into the handheld gaming ring is newcomer Tiger Telematics with its Gizmondo entertainment device. The Gizmondo will also sport now-standard features like games, music, movies and wireless capabilities, but it adds SMS and MMS messaging capabilities and a digital camera to the mix. The Gizmondo will hit stores in fourth quarter, and it has already been picked up for distribution by Toys ‘R’ Us in the U.K.