Could Immersion be taking a run at Sony’s peripherals business? Here is why they should…

The Case

Last year after an extended court battle, Immersion was awarded a $91 million judgment in a patent infringement case brought against Sony. The rumble effect in Sony’s signature DualShock pad was found to infringe a number of Immersion’s patent. Sony was also ordered by California district court to pay 1.37% license fee based on the sale of its PlayStation console. Recently, Sony lost yet another appeal.

Microsoft was originally named as a co-defendant, but wisely chose to settle out of court. They subsequently acquired licenses to all of Immersion’s rumble technology and even purchased a 10% stake in the company. This allowed Microsoft continued support of tactile feedback in their Xbox consoles.

Interestingly, Nintendo has never been sued by Immersion. They are believed to have developed their own technology and to hold their own patents. This of course means that they do not have to pay licensing fees, and that their newest console, the Wii, also includes rumble technology.

The Decision

Sony appears to have taken this case very personally. They are still pursuing various avenues of appeal in the courts, and rather shockingly, have decided not to include rumble technology in the pad of their PS3 console.

Originally having stated that rumble technology would interfere with their tilt sensors, Sony was publicly embarrassed when Immersion announced that they had managed to combine both technologies successfully. Immersion has also repeatedly offered to assist Sony in integrating the technologies.

Sony appears too proud to turn back to Immersion after losing their court case. While they claim publicly that their tilt technology adds more to gaming experience than tactile feedback, players seem to disagree: In most of the launch games and demos, consumers and reviewers complain that the tilt controls feel rushed and forced, and bemoan the lack of rumble support. Rumble technology has become an integral part of every home console. The PS3 is the first console since the introduction of the N64 which has no form of rumble support. A rumble pack was even released for the DS.

Sony has also inadvertently crippled its backwards compatibility support. Now, along with all PS3 titles, all PS1 and PS2 titles played on the PS3 will also lose their rumble support. Iplaying Metal Gear Solid without rumble…some of the puzzles actually require rumble to help achieve a solution

It also appears that the PS3 will not even support the PS2’s DualShock without specific drivers, which are as of yet unavailable. Legally this remains a gray area. Do Immersion’s licenses cover only the controllers, or do they extend to the console’s use of rumble as well? If the console is also covered, Sony won’t even be allowed to release drivers which support the DualShock 2’s rumble features.

Further, it is obvious that the tilt functionality was added as a reactionary response to Nintendo’s motion-sensing technology in the Wii. Early designs of the PS3 controller made no mention of tilt technology, and early prototypes of the tilt controllers were only made available to most developers after E3 this year (very late in development for such an integral feature).

Immersion to the Rescue?

Immersion has already proven that they can meet the challenge of integrating both tilt and rumble technology in a controller. If they can get PS3 games to support rumble, they stand to make an absolute killing selling their own third party controllers.

Would Immersion be infringing on Sony’s own patents by creating such a controller? Immersion could attempt to reverse-engineer Sony’s controller. Alternatively, they could try to license the technology from Sony, but that is unlikely to happen due to the bad blood between the two companies. Luckily, Immersion does not need to worry about these legal issues: they could release a controller without any tilt altogether. Marketed properly, it would still be more popular than Sony’s own pad.

The key to success here is to get the developers on board. Logitech (a company which regularly partners with Immersion, and also owns a 10% stake) already recruits developers of racing titles to support their force-feedback wheels. There is already a system in place, a way to add drivers to the games which will support different controllers.

If Immersion provides a simple interface, Developers could add rumble support to a game in very little time. Of course, the key to getting developer support is money. If Immersion offered developers between $10k and $20k, they could guarantee that many games would support their rumble technology. If they targeted 300 developers, the costs would not rise above $6 million, a small investment when compared to the potential rewards.

Immersion could steal the PS3 controller market altogether. Twenty to thirty million PS3s are expected to be sold in the next couple years. At $30 to 40 a unit, if half of the controllers sold come from Immersion, revenues could reach $450-600 Million. These are just rough estimates, but there is a lot of business up for grabs in the peripherals market. Such a move would also impact Sony, as they will look to recuperate some of their massive investment in the PS3 with sales of peripherals.

It is unlikely that Immersion will actually pursue an aggressive strategy such as the one outlined. However, given that their relationship with Sony is already strenuous at best, why not step in and fulfill the demand which Sony continues to claim doesn’t exist? What is there for them to lose?

Posted by Raoul on Thursday, December 14th, 2006 at 11:10 am.