Creating a handheld gaming device with built-in 3D capabilities in a market that hasn’t fully accepted 3D as a permanent medium was certainly a bold move by Nintendo, but probably one that hurt the company in the process. Gamers didn’t necessarily flock to the device when it hit retail shelves earlier this year, and as seen in recent weeks, low sales forced Nintendo to reduce the price in order to get units moving off store shelves.

But now company eyes are seemingly focused on the next revision despite a lackluster start. According to “insider” rumors (who were dead on in regards to Project Cafe), a revised model will launch in 2012 with “radically toned down” 3D capabilities. Nintendo reportedly still thinks that warnings of possible eye damage might be hurting sales, and has thus decided to not only re-think its decision to support 3D on a hardware front, but to welcome games that do not contain 3D content.

Is the 3D aspect hurting the device’s overall revenue? Probably not. Once the 3DS was dropped down to $169.99 USD, units began to fly off store shelves nationwide. The problem is that Nintendo is facing an app-ruled market where gamers have turned to iOS and Android to play shorter, cheaper games. The hosting devices can also make phone calls, access Facebook, stream video from a 3G or Wi-Fi connection, and even allow for VoIP calling. As stated many times in the past, gamers may just only want to carry “one device to bring them all and in the darkness bind them” like Sauron’s One Ring.

Nevertheless, Nintendo is intent on staying focused on dedicated handheld hardware. In addition to pulling back on the 3D capabilities, the revision – which will likely be called something else other than the Nintendo 3DS – will also feature support for a second analog stick. At this time, it’s unknown whether the second stick will be built directly into the handheld itself (it’s assumed so), but the company is reportedly working on a $10 add-on secondary analog stick for the current 3DS handheld. Nintendo is even telling developers to design games around the two analog sticks.

Tuesday Reuters said that Nintendo shares jumped more than 8-percent after news of the company trying to fix the 3DS disaster with a hardware revision began to surface. As if to compete with Apple’s supposed big reveal of the iPhone 5, cheaper plastic-based iCloud Phone and the 3G-capable iPod Touch, Nintendo will reportedly hold a trade show on September 13 in Tokyo to reveal its plans for the next hardware revision.

A Nintendo spokesman in Japan declined to comment on the reports, Reuters said.