Sony Game Group Buys Seattle Firm

SAN FRANCISCO (08/31/2000) - Nearly a year after it announced the creation of a landmark broadband distribution network, Sony Corp. (SNE) 's PlayStation group has finally taken a small first step.

Sony Computer Entertainment America, a subsidiary of the Japanese electronics giant, announced Wednesday that it has bought the Seattle-based multiplayer gaming-technology company RTime. The purchase is intended to help the group begin developing a broadband backbone to offer a wide range of gaming and entertainment-related services.

"This new corporate acquisition allows us to continue to move forward with our broadband plans for the PlayStation2 computer entertainment system, and ensure that we are providing our software developers and content providers with the most robust environment available," Shuhei Yoshida, VP of product development at Sony Computer Entertainment America said in a prepared statement.

Sony has banked its future on the promising yet mostly untested broadband entertainment market. But rather than focusing on its long-term Internet goals, Sony Computer Entertainment America has placed all its emphasis this year on launching PlayStation2 worldwide. The broadband initiative is set to launch next year.

The acquisition of RTime, though it is a first move among many expected to come, is interesting. To date, RTime has not been a big player in the multiplayer market, industry insiders say. It has developed technology that enables game- and content-related companies to offer multiplayer components online.

RTime has worked with a broad range of gaming and technology clients including Zombie, Mindscape Entertainment Online and Acclaim Entertainment Inc. (AKLM) . Last October, it began working with Macromedia Inc.'s (MACR) Shockwave to offer software to Shockwave developers that enables multiplayer gaming. None of these projects is a breakout hit, and only a few of the company's clients are the major developers on which Sony must rely to succeed with its next-generation gaming and entertainment platform.

By contrast, major game developers such as Electronic Arts Inc. (ERTS) have sought to build their own multiplayer software engines. In particular, Sony Online Entertainment, an unrelated unit within Sony, has already had several years of experience in handling these complicated networks. Rather than contract with outside developers, SOE has handled many of those technology issues in-house.

PlayStation's acquisition of RTime is seen as a conservative first step in the same direction.

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