Sony and Namco Bandai are to further strengthen their relationships by forming a new company, Cellius, to create PS3 games and content for mobile phones and PCs.
The company will be joint owned, with Namco Bandai owning 51 per cent of the venture and Sony owning the other 49 per cent, Bloomberg is reporting.
Cellius will create content based around the technology of the Cell chip, the processor Sony and partners International Business Machines and Toshiba spent 200 billion yen (EUR 1.2bn) developing.
The move highlights Sony's desire to go toe-to-toe with rival Microsoft in the entertainment sector, with both company's setting their sites on content for the digital home.
Namco Bandai has been a strong supporter of Sony since it first entered the home console market, creating some of its best-known franchises including Ridge Racer, Tekken and Ace Combat.
Namco Bandai's Ridge Racer 7 and Mobile Suit Gundam were the highest-selling games for the Playstation 3 last year.