The GameBoy Advance SP will cost $79.99 in the US

From September, it will cost 20% less in the US and Japan, with similar cuts expected in Europe before Christmas.

Portable gaming is a big market for the main console makers, but others are set to challenge that dominance.

Nokia has launched its N-Gage devices but others, like Gizmondo and Tapwave Zodiac, are set to challenge too.

A Nintendo spokesperson told BBC News Online pricing plans for the GameBoy Advance SP had not yet been confirmed for the UK and Europe.

But, she added, there were various "marketing initiatives" in the pipeline.

Sony's PSP and the Nintendo's latest model, the Nintendo DS, are expected to be released in Japan at the end of the year.

Nintendo has a 95% market share of the portable gaming market, however.

Massive leisure

But it said it expected to sell 14 million GameBoy Advance SPs as well as 70 million games by the year ending March 2005.

Sony launches its handheld at the end of the year

GameBoy Advance SP is a major boost for the games company, which has lost out to Sony and Microsoft in the video console market.

Since 1989, about 172 million GameBoys have sold worldwide.

However, it admitted that sales fell from between April and June 2004, compared to the same period in 2003.

Gaming has become a massive part of leisure and entertainment business over several years.

In 2003, global �10.1bn ($18.2bn) was spent on gaming, according to a report by analysts Screen Digest. It has predicted this is set to increase to �11.7bn ($21.1bn) by 2007.

Currently, London is playing host to thousands of games developers and analysts who have converged for two major trade shows and conferences for the industry.