Japanese video game maker Nintendo Co Ltd is developing an external joystick device for its 3DS handheld gaming device that would sell for about $10, French technology website 01net reported.

The peripheral device would be aimed at overcoming the lack of a second analog joystick controller, widely seen as needed for a superior gaming experience, the website reported, citing a source close to the company.

Nintendo has also asked certain game developers to come up with new titles that would be specifically designed for a dual-controller game, the website said.

Nintendo launched the 3DS in February to fend off growing competition from other games companies, as well as makers of smartphones and tablets, but a limited selection of new software for the device led to lower than expected sales.

01net also cited various sources as saying that Nintendo was developing a replacement for the 3DS -- originally heralded for its ability to provide a three dimensional gaming experience without the use of external glasses -- which would de-emphasize the significance of 3D and be released sometime next year.

Nintendo shares gained 9.3 percent to close at 13110 yen.

(Reporting by Christian Plumb; Editing by David Cowell)