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Sony Spends Big on Gaming R&D in Wake of Microsoft Court Win

Sony has lost out through Microsoft Xbox buying Call of Duty game maker Activision Blizzard, but the company is moving forward with a huge investment in gaming development.

Sony says it will invest $A3.09bn in gaming research and development in coming months with a focus on live service games and virtual and augmented reality.

The investment, reported by Nikkei Asia, represents around 40 percent of total R&D spending and surpasses its spending in electronics and semiconductors, the publication reports. The allocation is also more than double what Sony spent on R&D for gaming in 2020, it says.

Live service games have the specific aim of keeping users engaged and playing as long as possible in the hope they spend continual small amounts of money on in-game purchases. It offers a continuous steam of revenue for gaming platforms.

Nikkei Asia reports that earnings before interest, taxes, depreciation and amortisation (EBITDA) for Sony’s gaming business was up more than 60 percent from five years ago.

“Sony projects that the market for add-on style games will reach $19 billion in 2026, a figure that would surpass the market for hardware like the PlayStation for the first time,” says Nikkei Asia.

It says Sony already has been successful in live service gaming by relying on sequels to traditional games for software sales.

It says Sony aims to combine the resources of the nine overseas game studios it has acquired or invested in during the last two years to aid extended reality development.

The spend show the degree large gaming companies have moved beyond researching gaming consoles to gleaning revenue from having players spend as much money online as possible over a long period.

However, hardware developments will remain a major spend for companies beefing up their mixed reality capabilities.

Sony also wants to foster the games and media development community, this week announcing its first Sony Creators Conference, to take place in Los Angeles on August 9.

“The conference features speakers from the gaming, technology and film industries and many more,” Sony says in a statement.

“The panels cover a wide range of topics — from technologies enabling the cutting-edge visuals on Spider-Man: Across the Spider-Verse to bringing optical tracking to the virtual world of sports to the development of a superhuman racing AI agent that elevates the gameplay experience.”

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