UPDATE 1-Shanda Games raises planned IPO size by 32.5 pct

* Shanda Games ups IPO size, to sell 83.5 mln ADS

* Parent Shanda Interactive to sell 20.5 mln extra shares

* Estimated proceeds $960 mln

NEW YORK, Sept 23 (Reuters) - Chinese online video games company Shanda Games Ltd (GAME.O) has raised the number of shares it plans to sell in its initial public offering later this week by nearly a third, with estimated proceeds now reaching $960 million.

Shanda Games, which is being carved out of China media company Shanda Interactive Entertainment Ltd SNDA.O, said in an updated regulatory filing on Wednesday it now plans to sell 83.5 million American Depositary Shares, rather than the 63 million in its original filing, when the IPO prices on Thursday.

The 20.5 million extra shares being sold are all held by Shanda's parent, its sole shareholder. Shanda Interactive will still hold shares representing 96 percent of voting rights in Shanda Games after the IPO, according to the filing.

The price range of $10.50 to $12.50 remains unchanged.

Shanda Games, which will start trading on Nasdaq on Friday, produces "Legend of Mir" -- a popular multiplayer online role- playing game -- and operates "Aion" in China, the world's largest Internet market with more than 300 million users.

Another Chinese video games maker, Changyou.com Ltd (CYOU.O), was spun-off from Chinese Internet portal Sohu.com Inc (SOHU.O) in April. Changyou.com is the top performing U.S.- listed IPO this year, with shares up 145 percent since their debut. (Reporting by Phil Wahba; editing by Andre Grenon)