The Kyoto-based company said the new device would launch on Sept. 20 at a suggested retail price of 19,980 yen, or $199.99, compared with $299 for the Nintendo Switch.

Nintendo shares had risen on media reports earlier this year of a low-cost version of the Switch console, only to be battered after management appeared to dampen such speculation over the past few months.

In mid-morning trade, Nintendo's shares were up 3.6%, while the benchmark Nikkei average <.N225> was flat.

"A lower-priced version should stimulate demand," Jefferies

analyst Atul Goyal wrote in a note to clients.

He said the new device directly targets the 75 million owners of Nintendo's 3DS hand-held device, and that "this lower-priced version should add fuel to fire as this price-point directly targets those" owners.

(Reporting by Chang-Ran Kim and Makiko Yamazaki; Editing by Stephen Coates)