Sony Immerses Itself in Haptics

"Haptics" is the science of touch that lets you interact with your computer's virtual world. Feeling the bone-jarring vibrations through Logitech's (Nasdaq: LOGI  ) force-feedback Driving Force Pro steering wheel as you careen over the rutted terrain in Gran Turismo 4 is an example of the technology at work. While it has other uses -- doctors can train using virtual surgery, for example -- gaming is where most people will encounter haptics.

Sony (NYSE: SNE  ) , unfortunately, is encountering it in court these days. The electronics giant was ordered to pay $91 million to tiny tech company Immersion (Nasdaq: IMMR  ) and was also ordered to stop selling its PlayStation gaming consoles in the U.S. because they infringe on Immersion's patents. While the supply of PlayStations won't dry up any time soon since the order has been stayed pending an appeal, it could be represent a big payday for the small company. The judgment would total more than the company has made for the past four years combined.

Immersion is no stranger to taking on behemoths to enforce its patents. At the same time it sued Sony, it also sued Microsoft (Nasdaq: MSFT  ) for infringing on its patents with its Xbox console. Bill Gates ponied up $26 million to settle the lawsuit, and agreed to invest in Immersion as well as loan it an additional $9 million. Immersion sought more from Sony because its platform is more popular and widespread, and to cover the extensive legal costs the company has experienced from the litigation. Still, if the ruling is upheld or a settlement is reached between the two, Sony will be getting a bargain. Immersion usually realizes a royalty of 5% from the licensing of its technology and the judgment only amounts to what would be a 1.4% royalty.

Immersion is not completely dependent upon gaming, though. While it licenses its technology to Logitech, Sony, Microsoft, and MadCatz (AMEX: MCZ  ) for game consoles and PCs, it also licenses it to Samsung for use in cell phones, partners with Medtronic (NYSE: MDT  ) for surgical simulations, teams up with various auto manufacturers for assorted cockpit control features, and offers industrial, three-dimensional product-creation technologies. However, the company's computing segment does account for the vast bulk of its revenues, comprising more than 50% of the total.

Immersion's stock jumped 10% on the news yesterday while Sony's didn't register a blip, sensing perhaps investors' feel for the judgment on the prospective outlook for each. Gaming, it turns out, hasn't been the panacea Immersion was looking for, and haptics may just be a haphazard technology for the general public.

Fool contributor Rich Duprey often takes a haphazard approach to his life. He does not own any of the stocks mentioned in the article.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 491247, ~/Articles/ArticleHandler.aspx, 10/24/2016 3:09:27 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,227.10 81.39 0.45%
S&P 500 2,151.10 9.94 0.46%
NASD 5,303.67 46.27 0.88%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/24/2016 2:52 PM
LOGI $21.52 Up +0.08 +0.35%
Logitech Internati… CAPS Rating: **
MCZ $0.21 Up +0.00 +2.44%
Mad Catz Interacti… CAPS Rating: ****
MDT $83.35 Down -0.56 -0.67%
Medtronic CAPS Rating: *****
MSFT $60.85 Up +1.19 +1.99%
Microsoft CAPS Rating: ****
SNE $32.16 Up +0.05 +0.16%
Sony CAPS Rating: ***