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Players take the role of either Claris or Eliot, two children living in the city of Twin Seeds. In their dreams, they enter the world of Nightopia, where all human dreams are played out. An evil creature known as Wizeman is gathering power to take control of Nightopia. The children team up with NiGHTS, an ex-Nightmaren (nightmare-dweller) trying to stop Wizeman.
The goal of each level is to capture 20 blue chips to overload the Ideya capture and take back the orb it holds. After playing through four routes, NiGHTS is transported to meet and defeat another Nightmaren.
Aside from the immediate game mission, there is the complex and involving artificial life creatures called Nightopians (dream-dwellers) and their genetically modified counterparts, the Mepians. The game featured an evolving music engine based on the happiness or other moods of these creatures.
The unique features of this game centre on NiGHTS' flying sequences. Movement is natural and fluid; multiple moves can be freeformly played and linked and all with such a simple control mechanic. The game came bundled with an analogue joypad, one of the first on any home console.
Christmas NiGHTS was a one level demo of nights that included various extras. In Japan it was part of a Christmas Saturn bundle, and was given out free with magazines in the rest of the world. Also, it was available for rent at Blockbuster Video locations in America.
A sequel was planned, and supposedly used a tilt sensor in the analogue pad. Development of this was discontinued (apparently due to quality issues). Another sequel (for Dreamcast) was discussed, using a motion-sensing wand as a controller, but this was also discontinued. It is generally agreed that Yuji Naka refuses to release a sequel because he cannot improve the game any further than a graphical update.
There is also a bonus NiGHTS game in the GameCube version of Phantasy Star Online that can be downloaded to the Game Boy Advance, and NiGHTS themed pinball levels in both Sonic Adventure and Sonic Pinball Party .