Sony Online Entertainment, the online-gaming subsidiary of Sony Pictures Digital Entertainment, provides massively multiplayer online entertainment and produces a range of games from free parlor and trivia titles to subscription-based role playing in persistent worlds. SOE recently announced plans to enter the realm of online console gaming with PlayStation 2, having previously catered to the PC market only. The move was not entirely unexpected, but it represents a sizable shift in strategy for the company. SOE's premium games are made available via its The Station (www.station.com) portal, which has 12 million registered members, with content translated into Japanese, French and German.

SOE was established in the summer of 1995 as the online division of Sony Pictures Digital Entertainment. As such, its operations are entirely separate from Sony Computer Entertainment America, with Sony Corp. of America acting as SPDE's parent. In May 2000, SOE acquired Verant Interactive to further strengthen its position in multiplayer online gaming. Based in San Diego, SOE has additional development studios in Austin, TX, and St. Louis.

SOE essentially offers services allowing people to play games, find online opponents, attend organized fan events--both in game and in real life--and join communities, forums, chat rooms and message boards. EverQuest, a massively multiplayer online game (MMOG) for the PC, is SOE's flagship product. It was launched in March 1999 at a cost of US$15 million and has gone on to amass 425,000 paying subscribers, with some 100,000 online at any given time. Up to 2,000 players can gather on each of the 40 globally placed servers. EverQuest is one of a host of similar titles to have launched since the mid-1990s, including EA's Ultima Online, Microsoft's Asheron's Call and NCsoft's Lineage.

EverQuest was developed by Verant Interactive and incorporates 3D graphics, a vast online world known as Norrath and game play designed to encourage socializing and cooperation. In addition to running special events and tournaments, Verant has regularly added to the game and has released four expansions: The Ruins of Kunark, The Scars of Velious, Shadows of Luclin and the upcoming Planes of Power. It recently announced EverQuest II, which is set to appear in 4Q03.

A monthly Everquest subscription costs US$12.95 and equates to revenues of US$5.2 million a month--about twice what SOE spends to administer the service. Its success has encouraged Sony to further develop its presence in the genre, with the long-awaited Star Wars Galaxies launch set to mark the beginning of a one-title-per-year expansion. "EverQuest began making profit 12 months after launch, at which point we had amassed 200,000 subscribers," explains Scott McDaniel, SOE's vice president of...