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Sony says it will ‘aggressively’ invest in first-party studios and partnerships this year

PlayStation parent plans to invest $184m extra for in-house software, CFO claims

Sony has said it will “aggressively” invest in its first-party studios during its current fiscal year, in addition to partnering with external game developers on exclusive games.

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On Wednesday, Sony’s Games and Network Service division reported its best-ever year in terms of revenue and profit, driven by PlayStation software and hardware sales.

The company’s forecast for the coming fiscal year (ending March 31, 2022) revealed it expects even higher revenues from first-party game sales over the next 11 months, although it’s predicted a year-on-year decline for the current quarter ending June 30, compared to the period last year when lockdown restrictions boosted game sales.

Speaking to investors in a conference call on Wednesday, transcribed by VGC, Sony CFO Hiroki Totoki provided more details on the company’s plans for game software investment, telling listeners it intended to enhance its software offering via both internal and external investment.

Sony says it will ‘agressively’ invest in first-party studios and partnerships this year.
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Sony recently announced partnerships with the new studio from former Stadia games boss Jade Raymond, as well as investment in a multiplayer game from Bungie veterans, and Totoki suggested there could be further deals in the pipeline.

“We intend to increase development personnel and other in-house costs by approximately 20bn yen [$184m] year-on-year, as we further strengthen our in-house software,” the exec said in the conference call.

“To enhance our software offering, we intend to continue investing in partnering with external studios, in addition to aggressively investing in our in-house studios.”

He added: “As I just mentioned, we aim to strengthen the PlayStation platform through actions such as the recently announced partnership with Haven Entertainment, which was established by Jade Raymond, creator of the famous game Assassin’s Creed.

“To enhance our software offering, we intend to continue investing in partnering with external studios, in addition to aggressively investing in our in-house studios.”

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“In our additional investment of Epic Games, along with the rest of the Sony group we will also work to enhance the social and platform capabilities of games.”

The comments tally with those made by Sony Interactive Entertainment CEO Jim Ryan in a recent interview. Speaking to Nikkei this month, the PlayStation boss said SIE had been “quietly” investing in the creation of first-party software, and that it could pursue further M&A opportunities to bolster its in-house development capabilities.

“We have been quietly but steadily investing in high-quality games for PlayStation, and we will make sure that the PS5 generation will have more dedicated software than ever before,” Ryan said.

“We have repeatedly engaged in mergers and acquisitions, including Insomniac Games in the US. We will not rule out that option in the future.”

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In terms of upcoming exclusives, SIE is currently gearing up to release Housemarque’s Returnal on April 30 and Insomniac’s Ratchet & Clank: Rift Apart in June 2021.

Guerrilla’s Horizon Forbidden West is slated for release in late 2021 and God of War Ragnarök was announced via a brief teaser last September for release on PS5 this year, although nothing more has been heard of Santa Monica Studio’s sequel since.

In February, Gran Turismo 7’s release date was delayed from this year to 2022 due to “Covid-related production challenges” experienced by developer Polyphony Digital. Naughty Dog is also reportedly developing a remake of the original The Last of Us.

PlayStation recently closed its oldest first-party developer, Sony Japan Studio, but Ryan told Nikkei the company remains “committed to the Japanese market”.