ForwardWorks, the new subsidiary is headed by Atsushi Morita, president of Sony Interactive Entertainment Japan Asia.
"We will offer five or six games by March 2018 and release their titles by the end of this year," Tomoki Kawaguchi, executive director of ForwardWorks, said at the company's office, which opened in October in Ebisu, downtownTokyo.
"We will utilize SIE's intellectual properties [game assets]," Kawaguchi said. "Ape Escape," "ICO" and other popular games from PlayStation's early days may become available on smartphones.
SIE Japan Studio, SIE's game development unit, will produce games in cooperation with outside developers.
While the domestic market for home-use games amounts to slightly more than 300 billion yen ($2.88 billion), that of smartphone games are estimated at around 900 billion yen. Technological advances have made a wider variety of games playable on smartphones, further stimulating demand.
Famitsu reported that 34.6 million people play smartphone games in Japan, outnumbering home-use game players by more than 10 million and including 18.34 million who play only smartphone games.
ForwardWorks hopes intellectual properties built up over 20 years on PlayStation will help draw the attention of those 18.34 million people to the PlayStation 4.