Nintendo has fired the latest volley in the console price war by cutting the price in the US of its new GameCube.

From Tuesday, the price of the new games machine will drop from $199 (�136) to $149 (�102).

On successive days last week Sony and Microsoft slashed the price of their consoles, PlayStation 2 (PS2) and Xbox, in America.

This year, it's going to be a battle of software

Nintendo

GameCube had launched $100 (�68) cheaper than its rivals, and the latest cut again leaves it the cheapest of the new generation of consoles.

Nintendo believes keeping the price low is a key part of attracting new consumers.

"Our goal is to get as many hardware units out there as possible so we can sell software against a bigger installed base," said Nintendo marketing executive George Harrison.

"This year, it's going to be a battle of software."

Competitive position

The Nintendo cut comes as the nearly $27bn (�18.5bn) interactive entertainment industry gathers in Los Angeles for this week's Electronic Entertainment Expo (E3), which previews the latest hardware and software set for release over the coming year.

"We believe we came out at the best price and think this will put us in a very competitive position, particularly with the games we're showing this week at E3," Harrison added.

Nintendo's weapons are from a familiar arsenal including Super Mario Sunshine featuring the popular plumber and a powerful update of The Legend of Zelda, the sword-and-sorcery series.

Sony's PlayStation 2 is the 30 million market leader

At $149, Nintendo will roughly break even on sales of each GameCube, Harrison said.

The company has kept down manufacturing costs by not including DVD capability on the GameCube, unlike Sony and Microsoft.

Despite last week's ferocious cuts, it was initially unclear whether Nintendo would follow its rivals.

Harrison insisted Nintendo had already planned to lower its price.

"Nothing changed except we couldn't say anything until we were ready to announce it," he said.

GameCube, which went on sale in the US last November, has shipped about 4.5 million consoles worldwide so far.

Massive investment

Microsoft's Xbox, which launched in the same period, says it expects to have shipped 3.5 million to 4 million consoles by the end of June.

On Monday, Microsoft will announce $1bn of investment in an "online gaming environment" which has been compared to Disneyland on the internet, the New York Times reported.

Xbox Live users will be able to use the system to find fellow gamers to play a whole range of titles over the internet.

Microsoft hope the system will help boost sales of its console, which is already lagging behind its competitors.

PS2, which had nearly a year's headstart over its rivals, is the clear industry leader with more than 30 million sales.