Nintendo's new next generation console, the Nintendo Wii will have a wee price tag of just $200 (£110) according to analysts at Merrill Lynch.

In a report, Merrill Lynch analyst Justin Post predicted that the new machine, which will be released in time for Christmas, will sell for $200, a move that could prompt software publishers to create more titles for the gaming system.

So far Nintendo has been coy to the cost of the console, but it is thought that the move to offer a cheap alternative to both the Xbox360 and PlayStation 3 "will appeal to a broad demographic of both hard-core and casual gamers".

Based on the technical specs launched so far, the Nintendo Wii is considerable less powerful than both the PS3 and Xbox360, shunning next generation DVD formats, Blu-ray and HD-DVD for more concentration on gaming.

We will keep you posted.