Games & Network Services Segment

Game titles are the primary content IP for Game & Network Services. First-party titles, developed and sold by the platform owner, are particularly important as content IP for future value-creation and earnings. In addition to improving the personnel and work environment in its own studios, Sony Interactive Entertainment (SIE) continues to invest in, or acquire, firms with abundant creativity and cutting-edge technologies to build up Worldwide Studios (WWS), an association of first-party title production studios. Most recently, in August 2019 it acquired Insomniac Games, a longtime Sony partner that has developed many hit titles. As of May 31, 2020, WWS owns 14 studios and has become one of the world’s leading game-developer networks. With hit series like The Last of Us, God of War, and Uncharted, it is a strong engine for content IP production.

Third-party titles, meaning IP developed by game software developers outside the Sony Group, also play an important role in indirectly enhancing the appeal of the PlayStation Platform and its user community. Sony offers various forms of assistance, such as sharing its libraries and providing technical support to creators, including independent studios, to facilitate the best game-development environment possible.

Strategic Direction

To reinforce content IP, SIE will accelerate the enhancement and rollout of its portfolio of exclusive PlayStation titles. As a result of cooperation with in-house development and partner companies, sellthrough of PS4 software titles continues to grow, and the intention is to further enhance the lineup with compelling content. Along with that, further growth in recurring income will be achieved through various network service enhancements.

Through introducing new technologies in speed, haptics and sound, we can further improve on the exclusive experience available on the PS4, and aim to make the PS5 a truly next-generation console by providing game experiences that were not possible before. Games for the PS5 that deliver this new gaming experience are being made by first-, second-, and third- party developers, and we plan to introduce a compelling line-up of titles to our users.

In executing these strategies, greater emphasis will be placed on user engagement. SIE plans to provide content for a variety of game genres and formats, and make advances in unique and immersive interactive experiences such as VR. At the same time, SIE aims to create a better user experience, improve usability, and strengthen its use of data analysis. Making the best use of new and existing partnerships while driving growth will be important for achieving further expansions in scale. Through maintaining the momentum and ecosystem that PS4 built up until now, we will promote a smooth transition to the PS5.

SIE aims to achieve robust revenue growth by accelerating the virtuous cycle that has been established for the PlayStation Platform. This entails increasing active users and play time, enhancing network services and reinforcing content IP so that consumers select PlayStation as their platform of choice. Targeted outcomes include growth in active users, stronger retention and a shorter cash conversion cycle, from which expanded cash flow can be expected. We will explore expanding our first-party titles to the PC platform, in order to promote further growth in our profitability.