Sony directly expands Chinese game incubator in Microsoft

HONG KONG, Nov. 23 (Reuters) – Sony Group Corp (6758.T) said it plans to expand a program to identify and incubate Chinese-made games, in a race with Microsoft Corp (MSFT.O) to tap into the Chinese gaming market.

The program will invest more than 1 million yuan ($140,080) in each game it enrolls, funding not only small teams, but large teams with dozens of engineers or more, said Bao Bo, Sony’s director of Chinese game production.

The Japanese tech giant’s plans were made public during an event streamed live from the southwestern Chinese city of Chengdu on Tuesday to restart its China Hero Project program, which was stalled due to COVID-19.

“The scale of the third phase will be much larger than the previous two,” Bao said, adding that Sony will publish some games and PlayStation Studios will support enrolled projects.

Sony said it will be the publisher of Lost Soul Aside and Convallaria, two games entered in the previous two phases.

The China Hero Project unveiled its first two batches of games in 2017 and 2019 and has supported 17 titles, seven of which have entered the market.

Bao told Reuters in an interview on Wednesday that the new batch aims to contain 10 titles or more and that it welcomes games of all genres.

It marks the latest in Sony’s longstanding approach to China, which eventually led to a lucrative exclusivity deal with the Chinese hit game “Genshin Impact” outside of the China Hero Project. Little known before its launch in 2019, it became one of the world’s highest-grossing games.

Reuters reported last month that Sony’s success with “Genshin Impact” has prompted Microsoft to aggressively court Chinese game developers with large licensing deals.

To accelerate expansion, Sony announced it has formed the “China Game Production” team to oversee Chinese-made games. The Shanghai branch of Sony’s gaming-focused subsidiary, Sony Interactive Entertainment (SIE), now employs more than 100 people after entering China in 2014.

SIE Shanghai president Tatsuo Eguchi said the success of Genshin Impact has convinced Sony management that Chinese games are important, adding that Sony is allocating more resources there than ever. He also said that Sony’s partnership with Genshin Impact developer miHoYO is going well.

Sony sells the PlayStation (PS) consoles in China, where people have traditionally preferred playing mobile games.

It has sold more than 3.5 million PS4 consoles in China and SIE CEO Jim Ryan said it had sold about 670,000 PS5 units there since its Chinese launch in May 2021.

Eguchi said Sony’s goal is to sell twice as many PS5 consoles as it did for the PS4 and believed the China Hero Project could help achieve this goal.

“We want gamers around the world to better understand the creativity that comes from China. I always dreamed that console gaming would become a regular part of everyday entertainment for Chinese people,” he said.

($1 = 7.1388 Chinese Yuan Renminbi)

Reporting by Josh Ye; Edited by Alexander Smith and Louise Heavens

Our Standards: The Thomson Reuters Principles of Trust.

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