Software, net

12 Months Ended

Dec. 31, 2019

We capitalize direct costs used in the development of internal-use software. Amounts capitalized are amortized over a period of two to ten years on a straight-line basis.

We purchase, license and incur costs to develop external use software to be used in the products we sell, lease or market to customers. Costs incurred in creating software are expensed when incurred as R&D until technological feasibility has been established, after which costs are capitalized up to the date the software is available for general release to customers. Generally, the software we develop reaches technological feasibility when a working model of the software is available. We capitalize the payments made for software that we purchase or license for use in our products that has previously met the technological feasibility criteria prior to our purchase or license. Amortization of capitalized software costs is recorded over the estimated economic life, which is typically eight to ten years.

For our game themes, we have determined that such products reach technological feasibility when internal testing is complete and the product is ready to be submitted to gaming regulators for approval. We incur and capitalize regulatory approval costs for our game themes after technological feasibility is achieved. Amortization of regulatory approval costs is recorded over the estimated economic life, which is typically two to four years.

Software, net consisted of the following:



	As of December 31,
	2019			2018
Software	$	1,173		$	1,101
Accumulated amortization	(915		)	(816		)
Software, net	$	258		$	285

In the years ended December 31, 2019 and 2018, we capitalized $101 million and $109 million, respectively, of software.

The following reflects amortization of software included within D&A:



	Year Ended December 31,
	2019		2018		2017
Amortization expense	$	124	$	161	$	153