Year in review: Battle of the game handhelds

Xbox 2 won't have a hard drive. Or maybe it will. The PlayStation 3 will pack in all sorts of multimedia functions. Or maybe it won't.

This year, it sometimes seemed that gamers were more interested in rumors about game consoles they couldn't yet buy, as Sony, Microsoft and Nintendo kept a tight lid on plans for their next-generation game machines. But there was plenty of action with the current editions of each company's game machine, plus some efforts to pave the way for the future.

Microsoft set the stage early in the year by releasing XNA, a new development platform meant to serve PCs, the current Xbox and future generations of the game machine. Microsoft expects the tools to give it an edge as game publishers deal with spiraling development costs for next-generation consoles. Microsoft scored another coup a few months later when it finally convinced leading game publisher Electronic Arts to support its Xbox Live online gaming service.

Around the same time, Sony introduced a smaller version of its PlayStation 2 console, matched Microsoft price cuts and dropped a few more hints about the PlayStation 3, whose high-powered Cell processor inched closer to reality.

This was also the year Sony tried to grab a piece of the handheld gaming market with its PlayStation Portable, which was scheduled to go on sale in Japan in mid-December after a troubled history of delays and developer complaints. Nintendo counterpunched with the DS, an advanced handheld game player meant to expand a market the company already dominates with its GameBoy franchise. Mobile phone giant Nokia, meanwhile, struggled to keep a toe in the market with a revamped version of its ill-starred N-Gage.

On the PC side, the big news was the release of "The Sims 2," a Freudian sequel to the best-selling PC game franchise of all time. Interest in subscription-based online gaming continued to grow as well, attracting attention from big tech companies but few breakthrough hits. PC makers also looked to get into the game, with Dell and others selling colorful, heavy-horsepower models aimed at gamers.

Game publishers capped the year with an unprecedented tsunami of AAA titles, including "Halo 2," the sequel to Microsoft's signature Xbox title and the inspiration for one of the most lucrative launch days for an entertainment product of any type. The game also packed a little surprise for hackers, many of whom found themselves banned from the Xbox Live online gaming service run by Microsoft.

Game makers also managed to stir up a fair degree of controversy, with politics joining the usual bugbears of violence, cussing and nudity.