Nintendo is planning to launch a next-generation console in 2005 or 2006.
The console-maker has admitted the GameCube isn't selling too well because of competition from the Xbox.
Sony's PlayStation 2 is still the biggest-selling games console.
The GameCube hasn't been as popular in the US and Europe as Nintendo had hoped.
Even the release of big title SuperMario Sunshine didn't make as big a splash as expected.
Over Christmas Sony says it sold 8.5 million PlayStation 2s, while Microsoft says it sold more than a million Xboxes.
Nintendo's president Satoru Iwata said "We are developing a new home video game console.
"We will get ready for a battle."
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