FILE PHOTO: A display for the gaming company Nintendo is shown during opening day of E3, the annual video games expo revealing the latest in gaming software and hardware in Los Angeles, California, U.S., June 11, 2019. REUTERS/Mike Blake

TOKYO (Reuters) - Shares in Japan's Nintendo Co 7974.T rose more than 4% on Thursday after the company said it would soon launch Nintendo Switch Lite, a cheaper, handheld version of its hugely popular Switch games.

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.