Sony Plays Games with Verant Acquisition

Sony Pictures Entertainment announced Thursday that it has acquired online games company Verant Interactive, Inc. in a bid to expand its Internet gaming business.

The move represents a coming home of sorts for Verant, which was launched in 1999 as an independent spin-off from Sony Computer Entertainment's 989 Studio. When the deal is complete, Verant -- which operates such popular online games as EverQuest, Tanarus and Sovereign -- will become part of Sony Online Entertainment (SOE), a division of Sony Pictures Digital Entertainment Unit.

To further bolster SOE's goal to be "the dominant cyber-destination for interactive games," Sony named veteran digital gaming executive Kelly Flock as President and CEO of the newly-expanded Sony Online Entertainment.

"We're delighted to welcome Verant and Kelly into the fold at a time when interactive gaming is an increasingly important part of our business portfolio," said Mel Harris, co-president and chief operating officer for Sony Pictures Entertainment.

SOE on the Move

Financial terms of the deal were not announced, but Harris hopes that the acquisition of Verant and the naming of Flock as president of SOE will help Sony capture a larger portion of the billions (US$) -- $7 billion last year alone -- spent on computer games each year.

Flock's duties will include supervising the development of new interactive games by SOE and Verant and overseeing the SOE Web site, Station@Sony. The site currently features single and multiplayer online versions of its popular games.

As part of the deal, SOE will be vacating its New York offices and moving to San Diego, California, where Verant is currently based. Verant's current president, John Smedley, will remain with SOE as executive vice president and chief operating officer.

About Verant

When Verant spun off from 989 Studios, with the financial assistance of Sony Online Entertainment and Sony Pictures Entertainment, it obtained the rights to EverQuest and Tanarus. It also granted Sony Online Entertainment exclusive online distribution rights for whatever new titles it developed.

Sony said that as president of 989 Studios, Flock "oversaw the rapid growth of EverQuest into an interactive gaming powerhouse. Under his supervision, EverQuest broke all subscription-based online gaming sales records, reaching more than 250,000 paid subscribers and 350,000 units sold."

During its evening peak, more than 60,000 people play EverQuest simultaneously. Average playing time per player is about 20 hours a week.

Verant has a staff of more than 150 software developers split between its headquarters in San Diego and its office in St. Louis, Missouri. Sony has not announced how many of these employees will retain their positions.

Shift in Emphasis

Sony says that the appointment of Flock as president of Sony Online Entertainment "coincides with a shift in emphasis and location for the interactive gaming concern. The company has sharpened its focus on SOE as a creator and distributor of all kinds of networked gaming."

"I continue to believe that online gaming is the fastest-growing, most exciting area of interactive entertainment," Flock said. "Sony Online Entertainment has the edge in technology and content, and I am excited by the opportunity."