Sony to invest $ 18 billion to expand entertainment and sensors business
TOKYO – The Sony Group plans to spend 2 trillion yen ($ 18 billion) over the next three years to secure a dominant position as a supplier of games and anime and to expand its sensor business.
“In terms of financial strength, our investment capacity has increased,” President and CEO Kenichiro Yoshida said at the conglomerate’s annual corporate strategy meeting on Wednesday.
Sony expects to make 2 trillion yen or more in strategic investments through March 2024, according to its medium-term business plan. This represents an increase of more than 40% compared to the last three years. The investments will be financed by 3.1 trillion yen of consolidated operating cash flow that the group, excluding its financial services segment, expects to generate during the same period. It also plans to increase capital spending by 25% to 1.5 trillion yen.
Sony’s games and anime business is supported by a strong intellectual property portfolio, which includes the animated film “Demon Slayer” which broke box office records in Japan and the United States.
The company intends to leverage its intellectual property by developing a game based on Demon Slayer and making game-based movies and TV shows. He’s already working on a movie “Uncharted” based on the popular PlayStation game franchise.
Jim Ryan, president and CEO of the Sony Interactive Entertainment games unit, said 10 projects are currently in development.
Sony will also spend more to attract subscribers to its gaming services as well as to its animation and music platforms.
In addition, its entertainment subsidiaries are expected to deepen their cooperation and collaborate more with external partners.
“Sony is directly connected to approximately 160 million people around the world due to their desire to consume entertainment,” said Yoshida. “I want to increase that number to 1 billion.”
In recent years, Sony has become more acquisitive. Last year, it announced plans to acquire U.S. anime streaming service Crunchyroll for $ 1.2 billion. In April, he revealed his intention to buy out independent Brazilian music company Som Livre. Earlier this month, she completed the acquisition of London-based independent music distributor AWAL.
Sony is likely to continue its aggressive acquisitions of entertainment-related businesses in an attempt to expand its user base.
Yoshida also spoke of Sony’s “great” potential to develop its user base in India. Sony offers a direct-to-consumer video service in the country called SonyLIV, which focuses on local culture. It has grown its paid subscribers to around 5.6 million, or about eight times in twelve months up to this April.
“In order to bring kando, or emotion, for even more users in India’s growing market, we plan to increase our content offering, ”Yoshida said.
Regarding games, the CEO said one of the upcoming challenges for Sony will be its next-generation virtual reality system, which will likely incorporate “the latest detection technology”. Sony revealed in February that it was working on a new virtual reality headset for the PlayStation 5.
The company that started manufacturing radios and then made a name for itself with Trinitron TV will also make strategic investments in the development of semiconductors, artificial intelligence and other cutting-edge technologies.
Sony, which controls a large share of the global market for image sensors used in smartphones, is working to strengthen its research and development in automotive sensors. These include sensors intended for use inside vehicles as well as those that enter lidar systems, which send pulses of laser light to determine the presence, shape and distance of objects, often from very detailed way. They are an integral part of autonomous vehicles.
Yoshida also spoke about the company’s mission to develop the VISION-S electric vehicle.
Sony has so far made prototypes and carried out tests on public road, as well as verified the viability of 5G communications when driving at high speed. “The more we learn, we realize that there is still more to learn,” Yoshida said. “We will continue to develop VISION-S as an area of exploration. The area where Sony can make the greatest contribution to mobility in the future is automotive sensing technology.”
Meanwhile, some media reported that the Japanese government wants Taiwan Semiconductor Manufacturing Co. and Sony Group to invest 1 trillion yen to build the first 20 nanometer chip factory in Japan.
Yoshida declined to comment on the reports but noted that, “in general terms, stable semiconductor supply is important for Japan to maintain its international competitiveness.”