Sony to expand Chinese games incubator head-to-head with Microsoft

HONG KONG, Nov 23 (Reuters) – Sony Group Corp (6758.T) has announced plans to expand a program to identify and incubate games made in China, in a race with Microsoft Corp (MSFT.O) to exploit the Chinese gaming market.

The program will invest more than 1 million yuan ($140,080) in every game it enrolls, and will fund not only small teams but also large teams with dozens or more engineers, Bao Bo said, director of game production in China at Sony.

The Japanese tech giant’s plans were made public during an event broadcast live from the southwest Chinese city of Chengdu on Tuesday to relaunch the China Hero Project program, which halted in due to COVID-19.

“The scale of the third phase will far exceed the previous two,” Bao said, adding that Sony will publish some games and its PlayStation Studios will support the entered projects.

Sony has specified that it will be the publisher of Lost Soul Aside and Convallaria, two games registered in the two previous phases.

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

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

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

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

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

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

Sony sells PlayStation (PS) consoles in China, where people traditionally prefer to play mobile games.

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

Eguchi said Sony’s goal was to sell twice as many PS5 consoles as the PS4 and thought the China Hero Project could help achieve that goal.

“We want gamers around the world to better understand the creativity that comes from China. I’ve always dreamed of console gaming becoming an integral part of Chinese people’s daily entertainment,” he said.

($1 = 7.1388 Chinese yuan renminbi)

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

Our standards: The Thomson Reuters Trust Principles.

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