In a major push to diversify beyond consoles, Sony established a dedicated PlayStation mobile gaming unit. On Monday, Sony announced the launch of PlayStation Studios Mobile Division, which will operate independently of the console business.

Sony also announced on Monday that it had acquired Savage Game Studios, a mobile game developer based in Helsinki and Berlin.

The move follows a difficult second quarter for Sony’s gaming division, as well as a reduction in the company’s full-year profit forecast for the business as the Covid-induced boom — during which people were stuck at home playing video games — begins to fade.

Sony is also experiencing supply chain issues and is unable to meet demand for its flagship PlayStation 5 console.

Thanks to the PlayStation, Sony has dominated the console market for several years. However, the company is looking to diversify. This year, the Japanese gaming behemoth announced plans to release roughly half of its games on PC and mobile by 2025, up from about a quarter now.

“For that to happen, Sony needs to make big bets on mobile gaming,” Serkan Toto, CEO of Tokyo-based game industry consultancy Kantan Games, told CNBC.

And the opportunity is enormous. According to Newzoo, consoles account for approximately 27 per cent of the $196.8 billion games market, while mobile accounts for more than half of revenues.

The acquisition of Savage Game Studios adds to Sony’s recent acquisition spree as it seeks to boost title development across platforms.

“PlayStation Studios must continue to expand and diversify our offering beyond console, bringing incredible new games to more people than ever before,” said Hermen Hulst, head of PlayStation studios. “Acquiring the talented team at Savage Game Studios is another strategic step towards that goal.”

Savage Game Studios is working on a “unannounced new AAA mobile live service action game,” according to Sony. A “triple A” game is an unofficial industry classification for a blockbuster title. A live service game is typically one in which developers constantly update and add content in order to extend the game’s lifespan and generate revenue over a longer period of time.

According to Daniel Ahmad, senior analyst at Niko Partners, the success of Call of Duty Mobile and Diablo Immortal on mobile, both of which were originally designed for console and PC, shows that there is demand for well-known titles on smaller screens “if executed well.”

Sony’s mobile strategy will most likely rely on its massive library of intellectual property (IP), but with a focus on developing specific games for smaller devices, according to Toto of Kantan Games.

“Sony is very likely to not only bring existing PlayStation IPs to mobile but also encourage studios to develop new franchises for smart devices from scratch,” Toto said.

Sony is the latest console manufacturer to take a significant step into mobile gaming. Microsoft’s Xbox gaming division has also made initial forays into mobile. Nintendo has also spent the last three years putting a lot of effort into the smaller screen gaming format.

Sony will compete with companies it has never competed with before, particularly Chinese behemoths Tencent and NetEase, two of the world’s largest mobile gaming players.

Toto, on the other hand, believes Sony has a good chance of success.

“The mobile gaming market is overcrowded. There are over 1 million games in app stores nowadays. But players such as Sony, even if they are new entrants, can still make it just because of their fire power,” Toto said.

“There are not many companies like Sony out there, with such strong branding, a whole range of high-performing studios and a treasure trove of valuable IPs.”

(Adapted from IGN.com)