Sony Online on an ever-expanding Quest with EverQuest. (Enterprise: Technology).

Escapism sells in 2002.

If there are business lessons to be gleaned from the fantasy worlds dreamed up by Sony Online Entertainment Inc., this is a big one.

The San Diego-based company generates $5 million in monthly sales from computer games -- most notably an online game that lets people be trolls, elves and barbarians. Its signature game, called EverQuest, lets players travel around a complex, make-believe world they see on their screens.

EverQuest is a video game taken to the nth degree, with three-dimensional graphics and real-life partners and opponents. Since many players link up to a common server, the game lets strangers chat and interact -- even team up in their adventures. Teaming up is a must to advance in the game.

The term for the genre is the "massively multiplayer game."

"Think of it kind of as an ongoing Disneyland, where the customers are coming back every day," said John Smedley, chief operating officer for Sony Online Entertainment.

"We're about making sure that they're having a good time at the park, and making sure there's new rides and new things for them to do all the time," he said.

In development since the mid-1990s, EverQuest officially launched in 1999.

To maintain its customer base, Sony Online Entertainment -- a unit of Sony Pictures -- concentrates on expanding the market for EverQuest while it develops other projects.

Just as crucial is maintaining EverQuest's server farm of 44 computers and attending to the needs of its current customers.

Sony Online Entertainment has a profit margin of 40 percent, said Smedley.

Having the theme park add new attractions -- also known as dynamic content -- is not the only thing that generates return visits to EverQuest's world.

In an environment that mixes so much social interaction with game play, it is "crucial" that the players themselves be able to add content, said Henry Lowood, who has made a scholarly study of video games.

Lowood is a curator with the Stanford University libraries who teaches a course on the history of computer game design.

He added that massively multiplayer games require an intense level of server administration and real-time customer service.

Sony Online Entertainment employs 66 employees known as game masters, who help people who are lost in the fantasy world, mediate disputes and handle other aspects of customer service. A recent visit to Sony Online Entertainment had a game master chasing after a report of a faulty chat channel.

Game masters work around the clock, 365 days a year. Afternoons, evenings and weekends are the times for peak staffing.

EverQuest II 

Customer service manager Alan Crosby said he expects the number of game masters to double with Sony's new releases in 2003, and to triple with the rollout of the more advanced EverQuest II, which company officials expect in the latter part of 2003.

Sony Online Entertainment employs a total of 480 people. Many are housed in roughly 100,000 square feet on Terman Court, near Miramar Road. The company also has game developers in studios in St. Louis and Austin, Texas.

Sony claims 430,000 EverQuest players, who pay subscription fees of $12.95 per month. Company officials said the average player plays for 16 hours a week, and sticks with the game for 10 months.

To access the EverQuest world, players must prepare their personal computers by installing specialized software. Sony makes it a point to periodically release new versions, which give players more fictional territory to explore and different capabilities.

The new Planes of Power Expansion, for example, boasts 50 new monsters and a variety of new spells that characters can cast.

Projects in the works are new iterations of EverQuest (including aversion for Sony's PS2 game platform) and nonrelated games, like the massively multiplayer "Star Wars Galaxies."

On top of premium subscription games, Sony offers a variety of free games -- from cards to Jeopardy! -- on its Web site (www.station.com).

Chinese Market

As it expands its line of games, Sony Online Entertainment is also spreading out geographically.

Smedley recounted a visit to China's Internet cafes during the late summer.

"It's mind-boggling how much of a huge market there is over there," he said. "... I'd say it's probably pretty close to a million online gainers."

Some claim 10 times as much, he said, but he dismissed that estimate as inflated.

Sony Online has gone into the Chinese market in partnership with UbiSoft, a French video game company that already has a large presence there.

"That's exciting," Smedley said. "That's really exciting."

Other recently launched markets are Hong Kong, Taiwan, South Korea, France and Germany.

Like the magical world of Narrath, the scene of EverQuest, the business environment is not static.

Among the puzzles now facing Smedley and his staff are how to sell their games in the future.

"The biggest question on our minds is how will our business model change when we have multiple premium subscription games up," Smedley said by e-mail.

"Will it go to the cable TV model (i.e. a higher price for a basket of content) or will we be able to charge full price for everything separately?"

That key question, he said, will inform many decisions in the age to come.

RELATED ARTICLE: Sony Online Entertainment Inc.

Founded: Began operations in 1995, as the online division of Sony Pictures Digital Entertainment under Sony Corp. of America.

Sales: $5 million per month

Management: John Smedley, chief operating officer

Headquarters: 8928 Terman Court, San Diego 

Employees: 480