Sony Gets Electronic Arts on Its Online Gaming Team

Video game software giant Electronic Arts (ERTS Quote - Cramer on ERTS - Stock Picks) is planning to support the Sony (SNE Quote - Cramer on SNE - Stock Picks) PlayStation's fledgling online games initiatives this year, the company said.

EA, the leading independent gamemaker, plans to build online functionalities into its upcoming football game, Madden NFL 2003, for the Sony PlayStation 2, but will not do so in the version the company builds for Microsoft's(MSFT Quote - Cramer on MSFT - Stock Picks) Xbox, or Nintendo's competing Game Cube.

Shares in the Redwood City, California software company rose 1.87%, or $1.12, to $61.46 in afternoon trading. Electronic Arts' support is an early sign of confidence in No. 1 video game console company Sony, which has shipped more than 30 million units of the system worldwide. Owning more than a 20% market share in games published for consoles worldwide, Electronic Arts has in the past had enormous impact on the success and failure of any given platform.

"We believe that console-based online play is in its infancy but will grow in the next several years," said EA CEO Larry Probst in a prepared statement. "Early applications on the PlayStation 2 offer a great experience for consumers and a chance for developers to find out what gamers like about online play. We feel confident about the business model presented by SCEA [Sony Computer Entertainment of America] and their choice of an open technology infrastructure for providers and consumers."

The decision comes amid ongoing talks between Electronic Arts and Microsoft over several issues that have yet to be resolved. "We will continue to work with Microsoft to reach an agreement to allow us to make games that use the online capabilities of the Xbox," EA spokesman Jeff Brown said. "We like the fact that [Sony offers] an open system that protects the relationship between the developer and consumer and allows game companies to collect data on consumer preferences. The [data] is of paramount importance to us."

Industry analysts said Microsoft is pushing to launch a service, called Xbox Live, a paid gaming service that connects only to its Xbox. Some software industry sources have balked at the idea that Microsoft will essentially be controlling the relationship between the consumer and the game developer, namely the user information on their preferences. Over the past several months, the big three game companies also have been engaging in similar initiatives to offer online functionalities.