Extended visual cryptography [Ateniese et al., Theor. Comput. Sci.250, 143–161 (2001)] is a method that encodes a number of images so that when the images are superimposed, a hidden image appears while the original images disappear. The decryption is done directly by human eyes without cryptographic calculations. Our proposed system takes three natural images as input and generates two images that are modifications of two of the input pictures. The third picture is viewed by superimposing the two output images. A trade-off exists between the number of gray levels and the difficulty in stacking the two sheets. Our new approach enhances the registration tolerance to obtain the third image and reduces the difficulty of superimposing the image while allowing a variety of gray levels. It is done by extending dot-clustered subpixel arrangements and enabling continuous gray-scale subpixel values. The system has considerably enhanced tolerance to the registration error. We show this by superimposing the output by computer simulation and calculating the peak SNRs with the original images.