For all three companies, the stakes are large. "The race has begun to see who is going to set the architecture for the home entertainment system for the second half of the 1990's," said Bing Gordon, senior vice president of marketing for Electronic Arts, a maker of software for video and computer games.

Robert F. Kleiber, an analyst with Piper, Jaffray & Hopwood Inc., in Minneapolis, commented, "There is a franchise at stake here."

On Saturday, at the Consumer Electronics Show here, Nintendo created a stir when it said it was joining forces with Philips. Under the deal, Philips technology will be used to produce an add-on device for Nintendo game players, allowing them to use optical compact disks, which have far greater storage capacities than game cartridges. These new game players will also be more powerful than current models, offering more complexity, better sound and rich graphics.

On Friday, Sony announced an arrangement with Nintendo under which Sony will introduce a machine called the Game Player. It has two slots, one to play Nintendo's new game cartridges, the other for compact-disk games.

The Sony and Philips disk systems are not compatible.

Industry executives said Nintendo had linked up with Philips to negate the unfavorable impact of its arrangement with Sony. Under that deal, Sony has the right to sell and profit from the game disks. Nintendo, however, is disputing how broad that right is. The companies are expected to try to settle their differences through negotiation.