NTDOY Nintendo Co Ltd (PK)

TOKYO—Sony Corp. said Thursday it would start making games for smartphones including Apple Inc.'s iPhones and Android phones, following rival Nintendo Co.'s move into the fast-growing market.

The move allows Sony to fill a gap in its game business and expand its PlayStation line beyond game-dedicated consoles. Asian users increasingly prefer to play games in spare moments on the smartphones they already carry in their pockets rather than spending a block of time in front of a TV screen with a specialized gaming console.

That is particularly true in Japan, where many people commute by train. Revenue from smartphone games reached ¥ 473 billion ($4.21 billion) in 2014, more than the ¥ 373 billion in revenue from the console videogame market, according to the Computer Entertainment Supplier's Association.

Sony said its mobile games would be available first in Japan and other Asian nations, with the possibility of expanding elsewhere later. It said Sony Computer Entertainment Inc., the unit in charge of the PlayStation business, would set up a subsidiary called ForwardWorks to develop and distribute the mobile games.

A Sony Computer Entertainment spokeswoman declined to say when the first mobile game would be released or whether the company intended to charge for downloads of its smartphone games. ForwardWorks will be based in Tokyo and headed by Atsushi Morita, the chief of PlayStation in Japan and Asia. Mr. Morita is the nephew of the late Sony co-founder Akio Morita.

Sony's flagship PlayStation 4 console has sold more than 36 million units world-wide since its launch in November 2013, outpacing rival Wii U from Nintendo and the Xbox One from Microsoft Corp. Analysts say North America and Europe account for the majority of sales, with Japan lagging.

"We decided to focus on Japan and Asia for this new initiative because the mobile games are especially large in these regions when compared with other markets," the Sony spokeswoman said.

Nintendo also struggled for years with the issue of whether to introduce mobile games, which it feared could undercut its core business of selling game consoles and software for those consoles. It finally decided to make the move in 2015, and last week introduced its first smartphone game, called Miitomo, in Japan.

Miitomo recorded more than a million downloads in its first three days, according to Nintendo, which plans to release the game in the U.S. and Europe later this month. Four more smartphone games are set to be released by March 2017, although Nintendo hasn't said whether those titles will include popular characters such as Mario the plumber.

The Sony plan announced Thursday isn't the company's first venture into mobile gaming. In 2011, Sony introduced PlayStation Suite, later renamed PlayStation Mobile, which gave videogame creators a way to build games for the hand-held PlayStation Vita as well as selected smartphones running Google's Android operating system. The service was terminated last year after it failed to attract many users.

Amir Anvarzadeh, head of Japan equities at BGC Partners, said the latest move would be favored by investors, although he said mobile games weren't likely to contribute much to Sony's earnings. "Sony will be doing very well with or without mobile gaming content," he said.

Write to Takashi Mochizuki at takashi.mochizuki@wsj.com

(END) Dow Jones Newswires

March 24, 2016 07:15 ET (11:15 GMT)

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