Tokyo -- Sony Corp. said its 989 Studios video-game unit will become part of the subsidiary overseeing its game business to prepare for the PlayStation2 upgrade that will compete with Sega Enterprises Inc.'s Dreamcast.
Sony Computer Entertainment America Inc. will absorb 989 Studios, which develops and publishes games, as of April 1, Sony said. The management of Sony Computer Entertainment America will stay in place. Kelly Flock, president of 989 Studios, will leave "to pursue new business opportunities," Sony said in a statement.Tokyo-based Sony, the world's second-largest consumer-electronics maker, plans to introduce the Playstation2 game console in March. It can link to other Sony appliances and to the Internet, and will compete against Sega and Nintendo Co., which also plans a new console.
Slumping sales of the five-year-old PlayStation contributed to Sony's profit drop in the third quarter.
Sony shares rose 3 5/16 to 262 3/4 in U.S. trading.