SAN FRANCISCO (Business 2.0 magazine) - Nokia's first crack at the handheld gaming market -the 2003 release of the N-Gage, a videogame console that doubled as a cell phone - was a major flop. Unsurprisingly, consumers weren't keen on irritating features like having to hold the phone sideways against their face to take calls or remove the battery to insert a new game card.

But the cell-phone giant has learned from its mistakes. Instead of focusing on a single device of its own creation, Nokia is now pushing a software platform for connected mobile games, to be released on a range of Java-enabled phones - not just those made by Nokia.

Nokia's N-Gage was a flop. What's next?

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The reworked strategy is already beginning to pay off. At the recent Electronic Entertainment Expo in Los Angeles, Taito, a leading Japanese game maker, announced that it will adopt Nokia's Snap Mobile platform to publish and distribute mobile gaming titles like Bust-A-Move Mobile Mania. Gameloft, another wireless game publisher, reportedly will also sign on to use Nokia's Snap.

While there are a variety of tools available for programming mobile games, Nokia's Snap promises to make it easy for programmers to include interactive features that let cell-phone users play games against each other over wireless connections.

Even though Snap games won't be exclusive to Nokia phones, Nokia (Research) is betting that having more games available will help its sales.

"Right now, Nokia's really embracing gaming as a core strategy for their high-end phones," says Michael Gartenberg, an analyst from Jupiter Research. "They're lining up first-class gaming providers to get content from their phones. From Nokia's perspective it's great to get an endorsement from a company like Taito."

Bust-A-Move, which uses phones' wireless connections to provide instant-messaging features like chat and buddy lists, will be available to consumers later this year, on any phone which runs Sun Microsystems (Research)' latest wireless version of Java.

Nokia's new move is not just about gaming, says Paul Jackson, a principal analyst from Forrester Research who covers gaming and consumer devices.

"They're going for the multimedia high ground," says Jackson. "What they've done is given you a very powerful phone, a device that's great at taking pictures, videos, music playback, and games."

For Nokia, differentiating itself in the competitive world of handsets is no easy feat. And it's not enough for Nokia to win over consumers with games. It also has to persuade wireless carriers, which control most cell-phone sales, to support its gaming platform.

Next-generation Nokia phones with high-end gaming capabilities could drive consumers to sign up for data plans, which could mean increased revenues for carriers. But Nokia, in trying to put itself at the center of mobile gaming, could also be seen as unwanted competition by the carriers, which want to control the content found on their networks.

Forrester's Jackson says Nokia's new strategy is an improvement over the N-Gage, which carriers disliked because it was too tightly controlled by Nokia - but it still may not be giving carriers enough control.

"It's a better story than it was before, but still not what the carriers would like," says Jackson. "What they'd like is to run their own services and keep all the money."

Powerful forces fighting to decide who gets to run everything and keep all the money? Sounds like the makings of a great game.

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