Microsoft said on Monday it is launching a low-end version of its Xbox 360 in a bid to widen the game console's appeal to a broader audience that has flocked to rival Nintendo's Wii. The new Xbox 360 Arcade costs $280 and comes with five games previously available only for download over the Xbox Live online service. It does not have the hard drive found on more expensive Xbox models, but will have a memory card for saving progress in games. Xbox 360 Arcade console is the first Xbox 360 console also includes a wireless controller and a high-definition multimedia interface (HDMI) connection to enable high-definition output at 1080p.

The Arcade, which goes on sale on Tuesday, replaces the Core model, which carried the same price but didn't include any games or memory storage.

Microsoft also announced two new games aimed at younger players -- one from Activision based on the "Shrek" animated movies, and one from THQ based on Nickelodeon's SpongeBob SquarePants cartoon character.

The games will cost about $10 each and be sold through Xbox Live, Microsoft said.

Additionally, Warner Bros will start selling episodes of its classic "Looney Toons" cartoons over Xbox Live, while Nickelodeon, a unit of Viacom , will sell episodes of several popular shows such as "Blue's Clues."