LOS ANGELES (CNN/Money) - As it plans for the future, Nintendo seems to be drawing from the past.

The company displayed its next-generation video game machine for the first time Tuesday, showing a system that will combine the compact size of the Game Boy, the online functionality of the Nintendo DS and the company's vault of games.

Like the Game Boy, smaller appears to be better this time around. The machine, currently code-named Revolution, will only be as thick as three stacked CD cases. And the system will be backwards compatible with the GameCube, allowing people to continue playing games they have already purchased.

Nintendo's not stopping with GameCube games, though. Revolution owners will also be able to download virtually every game the company has ever created – from those made for 1985's Nintendo Entertainment System to the Nintendo 64 titles. The download service will be similar to Microsoft's Xbox Live Arcade, which is meant to appeal to a more casual gaming market.

The company did not announce whether it would charge for older games.

"The key here is not what you are playing but how you will be playing," said Satoru Iwata, president of Nintendo. "Revolution will also create entirely new genres to expand the definition of video games."

Because the system will not launch for over a year, Nintendo did not give a full line-up of new games for the Revolution, but Iwata did say work is underway on both "Zelda" and "Mario" games as well as a version of Square Enix's "Final Fantasy: Crystal Chronicles."

The Revolution will feature 512 megabytes of internal flash memory, with a slot allowing owners to expand the memory with SD memory cards. It will feature two USB ports, but use wireless controllers. The system will also be wi-fi enabled, allowing owners to play others around the country for free.

The Revolution, which is powered by an IBM (Research) processor and features a graphics chip designed by ATI (Research), will also be Nintendo's first deviation from a pure gaming machine. The company also confirmed that a small attachment (which will be sold separately) will let owners play standard DVDs on the machine.

While Microsoft's (Research) Xbox and Sony's (Research) PlayStation 2 have done this for years, Nintendo has resisted the trend, saying it preferred to focus only on games.

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