The much-anticipated console, dubbed Wii U, comes with a controller that features a touchscreen and camera.
The original Wii console was hugely popular but Nintendo has faced pressure from rivals with similar devices.
Nintendo hopes the new console will create a new genre of gaming.
Wii U will feature a set-top box similar to the first generation console.
But the 6.2-inch touchscreen controller comes with a front-facing camera as well as the more traditional buttons of a Wii remote and a motion detector.
Continue reading the main story Matthew Danzico BBC News, Los AngelesThe Wii U was unveiled here in Los Angeles to excitable, fidgety gamers, who had been waiting outside the Nokia Theater since sunrise.
The highlight of the console is its controller, a tablet computer-sized gadget that is surprisingly lighter than one would expect.
To the touch, the controller feels like it could be the iPad's chunkier, younger cousin.
Its 6.2 inch screen, which can provide additional information for games or even host its own, is vibrant and looks crisp in indoor light.
Like the last generation Wii, the new large controller often forces gamers out of their seats in order to interact with Nintendo's games. But the controller feels somewhat flimsy and seems like it would easily break if dropped on a living room floor. It also feels awkward to swing around, considering its size.
But its bulk is not stopping thousands of E3 attendees, who could be seen rushing into the Los Angeles Convention Center on Tuesday to have an opportunity to play with it.
It will broadcast high-definition video and can be used to make video calls and browse the web.PrivacyIn demostrations, the Japanese gaming giant showed off some of the things the controller will allow - including offering users a private screen to view gameplay information that is not shared on the big screen.
It will also allow users of games such as Wii Fit to weigh themselves and get a read-out via the controller rather than the TV.
Users can also swap game play between the big screen and the controller, for instance if someone else wants to watch TV.
Wii U is "an interesting new concept" thinks Dan Pearson, a staff writer at Gamesindustry.biz.
"It is a hybrid between a handheld with elements of tablet design but also has all the traditional controller elements," he said.
"Initially people may be confused by the controller but so were they when the first Wii was unveiled," he said.
Nintendo was also keen to show off the processing power of the new console.
"Nintendo has been under fire for chasing casual gamers and it is good to see them trying to win back core gamers," said Mr Pearson.
Wii U will work with older games and controllers and will be available from spring 2012.
There was no indication of the price of the new console.
The BBC's David Gregory has been playing Nintendo's new console at the E3 gaming show in Los Angeles.
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