I think these rumours are being fed by real devs, but giving false information as a means to create misdirection. There might be some truth in there, but I can't see Nintendo releasing a console that will be $400+ at launch, and will probably be sold at a loss.
The risk of going up against an established PS4 and X1 community which both have major games coming up, where the price of entry will probably be $250-299, bundled with games against a $400-450 console is huge.
If MS and Sony do a mid gen console update, the risk is even greater for Nintendo as they might be out priced, out spec'd and out gamed due to the other 2 having bigger libraries.
Any controller with a screen won't come cheap and will only drive up the core price of the system.
I still think Nintendo will go the PS4 route with a console that will look like the NES or SNES, specs similar to the PS4, a regular controller and the ability to play or connect with handheld and mobile games.
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