UPDATE 1-Nokia to close gaming service N-Gage

* Not to publish new N-Gage games

* To wind down N-Gage operations by the end of 2010

* Services never moved beyond niche audience

* To continue selling games in Ovi Store

HELSINKI, Oct 30 - Nokia will close its battered gaming service N-Gage next year, acknowledging failure in its first major services offering.

The handset maker's mobile gaming push has encountered major challenges over the years, with consumers first shunning its dedicated gaming phones.

The online gaming service, opened last year, never moved beyond a niche audience.

Nokia has started to look for new revenues from online services as its traditional handset market is maturing, with games and music being the first focus areas of the cellphone maker.

"We will no longer publish new games for the N-Gage platform," Nokia said on its N-Gage blog.

It said the games from its first major services offering can be purchased until the end of September 2010, and the community site will remain in operation throughout 2010.

After closing the N-Gage service it will continue to sell mobile games at its Ovi Store, a smaller rival to Apple's popular App Store.

Shares in Nokia were 2.6 percent lower at 8.62 euros at 1620 GMT.