UPDATE 1-Rumble maker Immersion stock up on deal with Sony
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LOS ANGELES, March 1 (Reuters) - Sony Corp.'s (6758.T)(SNE.N) video game unit and Immersion Corp. (IMMR.O) have ended their patent fight and signed a deal that opens the door to putting Immersion's rumble technology into Sony's PlayStation consoles, the companies said on Thursday.
News of the agreement helped to send shares in Immersion up nearly 33 percent to $9.60 from their Nasdaq close of $7.23.
Rumble makes a video game controller vibrate so that action on the screen seems more real -- for example, when a race car is off the track -- and has been a key feature in controllers for Sony's market-dominating PlayStation 2 console.
Immersion successfully sued Sony for patent infringement, winning damages that now stand at $97.2 million, including interest.
The video game giant appealed the 2005 court decision and -- in exchange for being allowed to continue selling games, consoles and controllers using the disputed technology -- paid Immersion about $30.6 million in court-ordered licensing fees between July 2004 and the end of 2006.
Sony left rumble features out its new PS3 released in November, saying they didn't work with motion sensors in controllers for the much-anticipated console.
Video game fans were skeptical of the explanation and decried the move, complaining that the lack of tactile feedback made play less realistic.
Under the new agreement, Sony agreed to pay Immersion's court-awarded damages. It will also pay Immersion 12 quarterly installments ending on Dec. 31, 2009, for a total of $22.5 million, in addition to certain other fees and royalty amounts, according to a regulatory filing.
Immersion Chief Executive Victor Viegas in a statement uttered the words that many PS3 owners longed to hear: "Our new business agreement with Sony Computer Entertainment is specifically intended to enable advanced vibration capability for the benefit of the PlayStation gaming community."
Viegas said the company would "very soon" make technical proposals for the use of Immersion technology in PlayStation products.
Sony Computer Entertainment added that the conclusion of the patent litigation and the agreement will have no material impact on Sony Corp.'s consolidated earnings forecast announced on Jan. 30.
Immersion also reported on Thursday that its fourth-quarter net loss narrowed to $2 million, or 8 cents per share, compared with its year-ago loss of $3 million, or 12 cents per share.
Revenue rose 25 percent to $8.6 million.
