Actually…this was done on the Lynx first as a prototype by R J Mical and networked 4 players. From the 1UP interview with RJ:
[quote]1UP: Coming off of the Lynx, in retrospect, what did that teach you about portable design that is still important these days?
Mical: I presume you want to keep it to hardware, but it taught me a lot about life too. [laughs] We learned then that you could think of little 8-bit processors as the original RISC machines. They were in fact powerful enough to do a lot of what you want a gaming experience to do. The Lynx had a lot of handmade hardware that created a lot of those effects…
The Lynx taught me the importance of the multiplayer experience. While we were developing the Lynx, we started getting involved in some of the multiplayer stuff that was just coming available back then. There was a really simple game where you’re just a smiley face chasing after other smiley faces in a maze, but it was multi-computer. Each person had his own view, and it was the simplest imaginable game. It was so much fun, though. We played it for hours and hours.
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-ChrisM