What do you get if you cross a phone with a games console? Maybe something like the N-Gage, the newest kid on the gaming block. Nokia's new baby, launched this week, is designed to grab a slice of the lucrative games industry pie, with the Research Room predicting that wireless gaming alone will be generating global revenues of $41.3billion by 2007.

The N-Gage is the first attempt to properly marry the mobile and gaming worlds. The focus is on wireless multiplayer gaming via Bluetooth and, eventually, GPRS. "We aim to appeal to social gamers who like to play on the move," says Mark Squires, Nokia UK's director of communications.

The games business is a tough market to break into. Microsoft made a slow start with Xbox, especially with pricing, but Squires is confident Nokia won't repeat those mistakes. "We are already in everyone's pockets and we don't feel we are entering a new industry."

There are other barriers, though. The Game Boy brand is synonymous with handheld gaming, and there are a variety of other devices, such as laptops and portable DVD players, that appeal to N-Gage's target audience.

"The N-Gage may appeal to the older gamer and businessman who wants to play portable games but is self-conscious about pulling a Game Boy out of his briefcase," says Nigel Davies, chief executive of developers Blitz Games.

The N-Gage itself is light, although not as stylish as smaller, dedicated mobiles. But while it looks fine, in a boys-toy style, the same can't be said of making a call. The speaker and earpiece are on the straight spine of the phone, so talking involves holding the top end to your ear. Perfect if you like the idea of a silver taco protruding from your face, less ideal otherwise.

The triband N-Gage uses the Symbian operating system and has all the standard features, as well as MP3 and FM radio playback. So making a call aside, the N-Gage is a well-designed and generously fitted phone. But Nokia is pitching N-Gage as a games console and, in those terms, the verdict is mixed.

The biggest design flaw is the loading system. To load or change a game involves unclipping the back, taking out the battery, sliding in the MMC card, refitting the battery and sliding the back in place. Not only does this discourage a 10-minute go on the bus, it makes playing on the go fiddly. Squires is aware of this, but defends it as a benefit. "We designed it so people wouldn't lose their games while travelling."

There are other snags, such as the lack of analogue control (extremely helpful for 3D games) and lengthy loading times. But graphically, N-Gage packs a powerful punch. The backlit screen is clear and bright, if a little small. The much vaunted 3D visuals are striking and a step-up from the GBA SP. Seeing Tomb Raider in all its PlayStation 1 glory is impressive. Sadly, the controls and erratic camera have also been ported over, making Tomb Raider a tough game to play on such a small screen. This is a recurring problem. Squinting at 3D graphics on the diminutive screen can cause headaches.

N-Gage's USP is multiplayer. We couldn't test the GPRS services, which include tips and high scores, but Bluetooth worked well. Connecting devices was straightforward, if not quite as quick as expected.

The launch titles are a decent mix, covering most genres. With publishers such as EA, Eidos and Sega on board, support, at least initially, looks strong. The pick is Tony Hawk's Pro Skater. Not only have the visuals of the PS1 original been replicated but the addictive and rewarding gameplay has, too. Bluetooth multiplayer is impressive, with some excellent multiplayer options.

For those who prefer their sports motorised, Moto GP should appeal, especially in multiplayer. Elsewhere, there is Pandemonium, an attractive pseudo-3D platformer, and Red Faction, a first-person shooter. Throw in Splinter Cell's sneaky adventuring and Super Monkey Ball's deceptively simple action, and you have a varied and solid launch line-up.

But succeeding in the industry takes more than just decent titles and a lofty vision. Price is important. At around £225, the N-Gage is not cheap and Davies feels this needs to change.

There is also the feeling that N-Gage is very much a work in progress. For everything Nokia has got right - variety of titles, Bluetooth and 3D graphics - there are unforgivable flaws, such as the difficulty in switching games. Maybe the next generation will fix these but, for now, N-Gage is an interesting curio rather than essential purchase.