Sony Group is set to invest over $2 billion in game research and development, with a special focus on PlayStation live service games. Nikkei Asia reports that these funds will be spent during the fiscal year ending March 2024.
PlayStation pivots to live service games to increase revenue
PlayStation’s 300 billion yen investment accounts for 40% of Sony’s overall R&D spending, surpassing its spending in electronics and semiconductors segments. Nikkei reports that since 2020, Sony has doubled its investment on gaming R&D as games are now “a major pillar” in its business.
The increased push towards live service and subscriptions comes as Sony looks for ways to increase PlayStation revenues. The company traditionally relied on hardware sales but now wants to look at other revenue drivers, like releasing live service games that enable players to purchase add-on content. Sony believes that the market for games with ongoing content additions will reach $19 billion by 2026.
Sony has always maintained that it purchased Bungie to strengthen live service game development despite many seeing it as a response to Microsoft’s acquisition of Activision Blizzard. Nikkei further adds that over 50% of Sony’s game development spending in the fiscal year ending March 2024 will be on PS5 live service games. By 2026, Sony hopes to increase this spending to 60%.