DRAWING ON THE BIG GUNS GAME MAKERS PULL TRIGGER FOR ELECTRONIC SHOW.

Byline: Brent Hopkins Staff Writer

The multibillion-dollar industry that turns child's play into big business will show off this week as software publishers and hardware manufacturers set up shop at the Electronic Entertainment Expo.

Game fiends and financial analysts will closely examine the hottest new gizmos displayed by exhibitors in the three-day affair, which will kick off Wednesday at the Los Angeles Convention Center.

With the four major platforms - Nintendo's GameCube and GameBoy Advance, Sony's PlayStation 2 and Microsoft's XBox - all widely available now, eyes will be focused on software. Firms are already beginning to reveal which wares they'll be unveiling, but industry followers expect some last-minute flash.

``Each publisher will probably have a few tricks up their sleeves, with a few surprise announcements,'' said Paul Kaump, a senior equity analyst for the Minneapolis-based research firm Dougherty & Co. ``The focus is coming out with attractive, alluring software.''

Price wars among console makers are expected to make the market even more lucrative than it was last year, when consumers spent $6.35 billion on software, according to E3's sponsor, the Interactive Digital Software Association.

Microsoft and Sony cut prices by one-third last week, dropping their tags to $199, and Nintendo responded by dropping the GameCube to $149.95. This brings the systems to an affordable level for a broader range of consumers, most significantly the children's segment.

``The hard-core gamers went out and bought the system at the outset without too much problem with paying for the machine,'' said Jeff Thomison, vice president of research for J.J.B. Hilliard, W.L. Lyons, a Louisville, Ky., broker. ``Now that the price is lower, there's more appeal to families. With PS2 and the Xbox having the DVD and CD players, $200 isn't much to spend for a high-end gaming system.''

Those on the software side are hoping customers will agree. Philippe Erwin, vice president of Interactive Entertainment for Burbank-based Warner Bros. Consumer Products, said families present a key demographic. Any price cuts to lure them in helps move games, especially character-driven, franchise titles such as his firm's Harry Potter and the Chamber of Secrets and its Cartoon Network lineup.

``It's good in general, both for family and mass market,'' he said. ``Our properties appeal to a wide array of consumers. If you look at the trend in gaming, the franchises become stronger toward the end of the cycle, so this is certainly good for us.''

Disney Interactive will also show off its new slate, including the return of its kitschy TRON property. TRON 2.0, based on its cult classic, will debut, and new titles such as Treasure Planet: Battle at Procyon and Kingdom Hearts will also be dusted off.

Calabasas' THQ Inc., whose line skews slightly toward the family market, planned for the price cut and now stands to reap the benefits. Brian Farrell, the firm's chief executive officer, said the more affordable hardware allow publishers to offer a wider variety of games, rather than just appealing to hard-core consumers. At E3, THQ will trot out a variety of titles, from the hotly anticipated Red Faction II, a shoot-'em-up, to more family-oriented fare, such as MX Superfly, a motocross title and Scooby Doo: Night of 100 Frights, licensed from Warner Bros.

``We're extremely optimistic about growth opportunities in this business,'' Farrell said. ``We've been gaining share, and those systems are growing all over. We think the market will double from 2002 to 2005.''

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3 photos

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(1 -- color) Power Rangers, Wild Force is among the games being featured by THQ.

(2 -- color) Scooby Doo: Night of 100 Frights is one of THQ's more family-oriented fare.

THQ

(3 -- color) Tron 2.0 from Disney Interactive will debut at the electronic exposition.

Disney