Sony boosts online gaming

Video game unit offers technology to developers for an online gaming "grid" for 1 million players.
February 27, 2003: 10:57 AM EST

NEW YORK(Reuters) - Sony Corp.'s video game arm will provide game developers with the technology they need to access a vast online gaming network run by Butterfly.net Inc., the companies said Thursday.

Closely held Butterfly.net, based in Shepherdstown, W. Va., signed a deal last year for International Business Machines Corp. to build a computer network that uses software to create a game "grid" that can support a million players or more.

Butterfly.net Chief Executive David Levine said there are currently nine games being tested on the grid and that he expects the first game to go live in the second quarter of 2004.

Industry analysts said Sony Computer Entertainment Inc.'s agreement to provide developers with the tools and software that work with Butterfly.net may make it cheaper and easier for game developers to create and support online games.


Online games allow users to play against other people from their respective homes. The games are written by developers who freelance or work for companies like Electronic Arts Inc. (ERTS: Research, Estimates) and THQ Inc.

"It's really expensive to develop a network because you've got to get the T1 (digital carrier) line, you've got to run the server and you've got to maintain the server even after you've developed the game," said Charlene Li, an analyst with Forrester Research.

"Most of the game developers are used to saying, 'I'm going to create the game and then after I'm done shipping that to the public I want to just move onto the next game'," she said.

While online gaming is viewed as having significant potential in the longer-term, it has not taken off significantly because of slow consumer broadband adoption and still-developing business models, among other reasons.

Though Sony and Microsoft Corp., which makes the Xbox, have both claimed early success for their online gaming efforts, their percentage of online users is just a small fraction of the number of people using the company's PlayStation and XBox game players.

For instance, Japan's Sony has shipped 50 million PlayStation 2 units but has sold only 400,000 network adapters, which allow users to play games online. And some game software publishers have shied from Microsoft's strategy of centralizing access and billing.

The computing network, or grid, is built with computer servers from Armonk, New York-based IBM, the world's largest computer maker. The servers run IBM's integration and database software and are located in two IBM data centers. They also run the Linux operating system, which is an open-source system that is free to be copied and modified.

Sony's (SNE: down $0.04 to $38.05, Research, Estimates) U.S. shares edged lower while IBM (IBM: up $0.85 to $78.25, Research, Estimates) stock rose in New York Stock Exchange trading Thursday morning. Electronic Arts added 96 cents to $52.70, a gain of about 1.8 percent on Nasdaq.

Originally posted by jasonr114
agreed. i wonder if they will charge money for it like Live? If not, hopefully xBox will stop charging $.

Originally posted by jrutz
Basically, this says they are going to maintain their own server farm for their online games? Kinda like what Microsoft does with XBL?

Jeremy

Originally posted by s}{ammer
gcribbs, that is exactly how I took it also. At first I liked Sony's hands off approach but after having xboxlive and enjoying it I also see the benefit of having the centralized servers. This seems like a way for Sony to do the same thing while still having the hands off approach and still allowing others to have their own networks.