Sony "Significant Increase in R&D Budget, Shift to Subscription Model"... Tension Over MS-Blizzard Merger

Research and Development Expenses More Than Double in 3 Years
Full-Scale Expansion of Paid Content Proportion

Japanese electronics company Sony announced that it will more than double its research and development expenses in three years and will expand the proportion of paid content going forward. This move is interpreted as a preparation in response to the recent high-profile acquisition of Activision Blizzard by Microsoft (MS), which has become a major topic in the gaming industry. Intense competition in the gaming market is expected in the future.

[Image source=Reuters Yonhap News]

According to Nihon Keizai (Nikkei) on the 13th, Sony has set its research and development expenses for the fourth quarter of this fiscal year (December 2023 to March 2024) at 300 billion yen (2.7693 trillion won). This is more than double the 144.5 billion yen recorded in the fourth quarter of 2021 (December 2020 to March 2021). This accounts for 40% of the total research and development expenses of the Sony Group. It is interpreted as a determination to focus research and development on the gaming sector going forward.

The game sales strategy, which had focused on devices, CDs, and content sales, will also expand its transition to a paid model. Games released by Sony in the future are expected to mainly be 'live service games,' where players purchase additional items or scenarios during gameplay. The market size for such 'add-on' type games is expected to reach 2.66 trillion yen (24.6 trillion won) by 2026. According to this figure, the game software market will soon surpass the market size of game devices such as PlayStation.

This is seen as a measure to respond to the news that Microsoft, the maker of Xbox, one of Sony PlayStation's biggest competitors, is acquiring Blizzard. Nikkei pointed out, "The rival American company MS is proceeding with the acquisition of the major game company Activision Blizzard," and added, "MS is strong in games utilizing cloud technology."

[Image source=AP Yonhap News]

Sony is also moving into metaverse development targeting Apple. As Apple is expected to release the goggle-type device 'Vision Pro' to the market next year, there are predictions that 'cross reality' (XR) technology, which connects real and digital virtual spaces, will soon captivate consumers in the gaming industry. XR has the advantage of allowing game content to be enjoyed beyond audiovisual senses, engaging all five senses and enhancing immersion.

Sony plans to leverage its strength in computer graphics (CG) development technology to develop gaming technologies enjoyed in virtual spaces. In addition, it will actively utilize the development capabilities of nine overseas game studios it recently acquired.

Sony President Hiroki Totoki stated, "We will continue to make strategic investments prioritizing intellectual property such as games."

This content was produced with the assistance of AI translation services.