Microsoft's Xbox 360 game console will cost either $299 or $399 when it goes on sale at Christmas.

The US firm made the announcement at the German Games Convention in Leipzig on Wednesday.

The basic Xbox 360, dubbed the Core System, will retail for $299 in the US and 299 euros in Europe, while the premium console with all the added features will sell for $399 and 399 euros.

Pricing for the Japanese market will be announced at the Tokyo games fair next month, Microsoft said.

Microsoft has yet to confirm an official launch date for the Xbox 360 but it is expected to be out before Christmas.

The premium edition - distinguished by signature metallic detailing - will include a headset, wireless controller, 20GB hard drive, membership to Xbox Live and remote control.

The Core System bundle consists of the console, a wired controller and a standard AV cable.

Games for the Xbox 360 will include Quake 4, Resident Evil 5, Tony Hawk's American Wasteland, Need For Speed, Tiger Woods PGA Golf, Elements of Power and Project Gotham Racing.

"The sheer entertainment value of Xbox 360 cannot be overstated," said Robbie Bach, chief Xbox officer for Microsoft.

"While the system has the muscle to power awe-inspiring graphics, audio and online play, it's also got the intelligence to serve as a one-of-a-kind entertainment device that plays CDs, DVDs, MP3s and digital content from an array of devices, including portable music players and digital cameras."

The Xbox 360 is Microsoft's answer to Sony's Playstation 3 and Nintendo's Revolution.

Sony said it plans to launch its PlayStation 3 in spring 2006. No release date has been announced for the Revolution.