Nikon has announced the 1 V3, the latest in its line of compact system cameras. And it's all change.

Unlike the earlier 1 V2 model, which came complete with an electronic viewfinder and chunky grip, the V3 opts to make such features optional accessories. So you can buy the basic V3 unit with a lens and expand into the system for those more advanced features should you so wish.

READ: Nikon 1 V2 review

This is really the Nikon 1-series' selling point: size. As the camera line uses a 1-inch sensor size, it's smaller than almost any other compact system camera line out there. And the Nikon V3 looks like a high-end compact camera from the official pictures we've seen. Looks like Nikon has found its focus in this sector.

Spec-wise the sensor bumps the resolution up a notch by using a brand new 18.4-megapixel chip. That's 4-megapixels more than any of the earlier 1-series models.

But there's more. In addition to the super-fast hybrid autofocus system and 20 frames per second burst mode, the V3 goes all iPhone 5S by being the first system camera to offer 720p video at 120fps for quarter speed playback. However, this option - aptly named Slow Motion - is limited to a 12-second capture and 3-second playback.

We think Nikon has been rather clever with the V3, in a similar fashion to how Panasonic positioned its Lumix GM1 model. It trims back the fat and despite its interchangeable lens functionality manages to align itself with the high-end compact camera market.

READ: Panasonic Lumix GM1 review

The "make it or break it" moment comes down to price. The V3 will be sold as a body and 10-30mm f/3.5-5.6 power zoom kit for £800, or as the same kit with the optional grip and 2,359k-dot DF-N1000 electronic viewfinder accessories in one bundle for £1,050. On the face of it that might not be quite so clever after all as you could opt for something like a Fujifilm X-T1 for the same cash. Decisions, decisions.