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NEW YORK (CNN/Money) – With things going pretty smooth in Norrath these days, the company behind "EverQuest" is looking to branch out.

Rather than sticking with the swords and sorcery that have served it so faithfully for the past six years, though, Sony Online Entertainment (SOE) is focusing on more modern weapons this time around.

While the company won't make any formal announcements about its next massively multiplayer game for quite some time, president John Smedley told me recently that a new action title is in the works. And if things go according to plan, it will make its debut at E3 in 2006.

It won't be SOE's first foray into an action-based persistent world. "PlanetSide," a massively multiplayer online first person shooter launched in May 2003, has been moderately successful, but hasn't come close to the success of "EverQuest". So what's different this time?

"We know what we're doing now and we're going to take it to the next level," said Smedley, who declined to give any firm details on the game at this point.

SOE's expansion plans go further than action games. Despite the company's failed attempt to bring strategy gaming to the online gaming world with "Sovereign," that genre remains a personal favorite of Smedley's.

"We're always looking for the right idea and we didn't have it [with 'Sovereign']," he said. "We will be in the strategy market. It's just a matter of timing. We'll get it eventually. ... Our goal is to be the dominant player in every major genre."

SOE has long been the king of the massively multiplayer online game hill. Roughly 800,000 people currently pay a $13 per month subscription fee (though some get discounts for year-long subscriptions) to play its games.

The launch of Blizzard's "World of Warcraft" last year has proved to be the stiffest competition SOE has faced, however. In less than four months, Blizzard signed up 1.5 million subscribers. (The game is currently available in several more countries worldwide than the latest version of "EverQuest".) Smedley said he's been watching the trends closely.

"Does it concern me? Yeah. I'd be lying if I didn't say it was," he said. "'World of Warcraft' has proven Blizzard is a dominant company. On the other hand, we're still very strong and remain the market leader – and we're branching out into a multi-platform arena. I think there's enormous potential in the console space."

Among those console interests is Sony's (Research) handheld PSP. SOE's "Untold Legends" (a hack and slash role playing game) has proven to be the system's best selling game. Despite the PSP's internet capabilities, however, the game doesn't allow players to connect and play across long distances. An in-the-works sequel will address those complaints.

SOE is also in talks with select wireless providers that would let owners of its PSP games to freely and automatically log onto their Hot Spots in public areas (such as coffee shops and airports). The plan, said Smedley, is if you enter one of those Hot Spots and decide to play for a bit, you'll be able to log on without having to configure your PSP with a username or password – and without having to pay the usual fee.

In return for the bandwidth, the wireless provider would likely get advertising in trade, perhaps on a game's loading screens, perhaps in game. Negotiations are continuing.

"I'd say we're about 70 percent of the way there," said Smedley.

If the deal happens, it won't be the first sort of in-game advertising SOE has handled. The company recently started a test program allowing "EverQuest II" players to order a real-world pizza without leaving the game, simply by typing "/pizza".

The program has been a success. SOE extended its deal with Pizza Hut and is currently in talks with other pizza providers. It's also exploring similar ideas, but Smedley said he wouldn't want to add them unless they provide an incentive for the player.

"Let's say we do '/cd'," he said. "You type that in and with one click pay for [the compact disc] and it gets sent to you. The important thing to me is that the users get a deep discount. We don't want to spam the users. I want this to be something they see as a benefit."

Though the numbers for massively multiplayer games aren't bad, they remain a niche in the gaming industry. To expand SOE's potential audience, the company will soon announce smaller puzzle games for two and four players. While those games won't be massively multiplayer or have any sort of persistent world, it's not out of the question for the long term.

The quicker way to introduce a larger audience, though, is through well-known names, said Smedley.

"What it takes to bring the masses is familiarity," he said. "If EA (Research) took NASCAR online ... and made that more commercial – say, starting with 16 players, then 32, then the MMO space – that's how you're going to grow the space."

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Morris is Director of Content Development for CNN/Money. Click here to send him an email.