There was no shortage of news coming out of CGDC this year, but one bit of news was a serious no-show - at least officially. And that was news about Sega's mostly-secret Katana system. The Sega setup, in fact, looked more like a booth giving out aspirin at a health fair than that of a major international company poised for a large scale comeback (although this will unlikely be the case at E3)

　　Folks at the NEC PowerVR booth had "no comment" regarding the status of the Sega system even though it's commonly believed that NEC is working closer with Sega than either party is willing to admit.

　　There was one technology at the show, however, that those with a little technical savvy and a touch of imagination might imagine to be an integral part of Katana when it's released in Japan later this year.

　　ATI Technologies, maker of graphic cards, was showing off a single set-top box called the Set-top Wonder CE that was running Microsoft's tiniest of operating systems, Windows CE 2.0. The entire OS fits into a space of 2.5 MB of ROM and the unit that ATI was showing was running with a DVD player. Although the drivers and the hardware are fairly early in the development cycle, there was enough solid technology running to raise some eyebrows.

　　The ATI system is run through an infrared port from a cordless keyboard. The prototype on display was equipped with USB ports and a modem. For output, a Rage Pro Turbo chip with a TV tuner was adapted for CE and capable of handling hundreds of channels - and has a preview feature that splits the screen into 16 viewable channels at once.

　　The demo system ran DVD movies, could browse the web and play DVD games. David Gould, project team leader for the Set-top project, showed us a ported version of SIMIS' Terracide, the only game the company was showing off on the system. Although there was a little graphic problem with the game which Gould attibuted it to an early video driver problem, it looked rock solid. He went on to say that the unit had the potential to run Windows games since the underlying multimedia technology for the version of CE was a subset of DirectX (the technology that makes multimedia possible on Windows).

　　The demo unit's one unique feature was its small video camera. A demo took a camera feed and mapped it onto several different graphical objects in real-time. With throughput like this and a fast connection, multiplayer games could incorporate features such as rendering an image of your face onto your opponent's screen as you nail him or her to the wall. With games like FireTeam and Monster Truck Madness II, that are starting to use voice communication as a feature in multiplayer matches, this video component could be the next step in online gaming.

　　Gould informed GameSpot News that the company isn't going to produce the machine for the mainstream market but is hoping to license some of the technology to other hardware makers.

　　Another surprise was that ATI said that current, standard CE handheld apps would be options for developers as well. These apps would include simplified versions of Word, Excel, PowerPoint, and Outlook - along with a series of smaller parlor-like games.

　　Given the fact that Sega is likely using CE for Katana, this small ATI product shown at CGDC this week may be an indicator of what's to come from Sega.