The gaming industry may be riding the crest of a wave, but Ian Hardy found out at the Consumer Electronics Show (CES) in Las Vegas that there are even more exciting times to come.

2005 will undoubtedly be the year of the handheld.

It is PlayStation Portable (PSP) against Nintendo DS.

Nintendo has more than 90% of the handheld gaming market in the US, so for it the stakes are high.

The DS has been getting good reviews in the gaming community, especially for its touch screen and extensive selection of games.

The quantity and quality of titles will play a huge part in attracting consumers to either the DS or PSP.

George Harrison, a senior vice president at Nintendo, says that developers are barely scratching the surface in terms of what the DS makes it possible to do with games.

"We expect to see some really unique applications of the touch screen and these will be unveiled at the E3 show in May in Los Angeles."

After selling more than 500,000 units since its Japanese launch last month, the PSP was officially introduced into the US market at CES.

Hot trends
Game manufacturers also announced details of new and familiar titles that will run on the wide-screen format and make use of built-in wireless capabilities.

While Sony and Nintendo battle it out, newcomer Gizmondo is trying to establish itself in the handheld gaming market.

Its marketing team from the UK went all out to create a buzz at CES, for their device that can play music and movies, has a built-in camera and GPS receiver that can be used in games.

James Beaven, of Gizmondo, says: "You've got gaming that will actually pick up your surroundings and make that part of the game arena.

"Other players in relation to you also become part of that physical game reality.

"This is such an important year in terms of mobile gaming. It's really going to become the year that the whole thing explodes."

Also likely to be a hot trend in 2005 will be games on mobile phones thanks to more powerful phones and faster networks.

New, cell-sized 3D screens are sharp, clear and vivid and the graphics are comparable to the PlayStation 1 era.

Dan Vivoli, of graphics chip maker Nvidia, says: "This year you'll start to see - starting with the high end of the market - people enjoying very immersive games.

"And I think that very quickly, in the next year or two, you will see that begin to filter down into the mainstream market.

"It will be a common thing for people to have very immersive, very compelling experiences.

The numbers of people playing games on the move and on their phone is on the rise too.

It is estimated that about two billion people will own a phone by 2006 and that about 15% of users will download at least one game.

Cell phone carriers, game developers and hardware manufacturers all agree the mobile phone market is where the most gaming growth will be this year.

From BBC News