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Nintendo said Monday that it has set the price of its next-generation vidgame console GameCube at $199, undercutting the price of higher-horsepower systems such as Microsoft’s Xbox and Sony’s PlayStation 2 by $100.

The move by Nintendo is a definite shot across the bow of Microsoft and Sony in the upcoming gaming console wars, especially considering GameCube is expected to hit store shelves only days before Xbox bows this November. The Xbox will sell for $299, the same price as PlayStation 2.

Simple and cheaper

While competing systems feature hard drives, Internet connections and DVD and CD playback, Nintendo is focused on making GameCube simply a gaming machine, and thus, a cheaper machine to produce.

Microsoft is expected to lose as much as $125 per Xbox it sells, hoping to make back losses on royalties from games it sells. It is unclear just how much Nintendo will lose with GameCube, but the system’s games will cost $50 each.

But Microsoft is betting big on Xbox, backing the system with a $500 million marketing campaign, the most money the software giant has ever spent to launch a new product.