Today Sony hosted its Corporate Strategy Meeting and IR Day events in Tokyo, Japan, and the company’s executives had quite a few interesting elements to share about the upcoming plans for the PlayStation business.
First of all, President and CEO Kenichiro Yoshida explained Sony’s mid-term corporate strategy over the next three year, which means until March 31st, 2021. For the Game & Network Services business segment, which includes PlayStation and PlayStation Network, we hear that the plan is to be connected with both users and developers with PlayStation 4 as the core of the business.
The basic strategy going forward is to further expand PlayStation Network, which has become one the world’s leading network services with more than one trillion yen in annual sales and over eighty million monthly active users.
Sony is aiming to grow the subscriber base of PlayStation Plus (we recently learned that the service passed 34.2 million paying subscribers), and increase user engagement for the PlayStation Network measured by login frequency and time spent on the platform (in fiscal year 2017 PS4 users clocked more than 800,000,000 hours of gameplay per week). This is also achieved by encouraging more people to use PlayStation VR, PlayStation Now, PlayStation Vue, and PlayStation Music.
Last, but not least, the house of PlayStation aims to strengthen its IP portfolio by creating new IP and utilizing existing ones for its first-party games, on top of harnessing growth opportunities in areas which include additional content for games.
This was also echoed later during the IR Day Presentation by Sony Interactive Entertainment President & CEO John Kodera, who mentioned that strengthening first party-games isn’t just a matter of creating new IP, but also pushing existing successful ones. That being said, more exclusive games are coming, with the company aiming to enrich and utilize its exclusive titles portfolio. The three years included in the strategy plan mentioned above are the time to flex in preparation for a further leap towards future growth.
Since the PS4 is now entering the final phase of its life cycle, which could cause unit sales to gradually decline, recurring revenues from subscription services like PlayStation Plus can mitigate that effect of the platform’s life cycle, stabilizing the profit structure.
Challenging areas of the business include PlayStation VR, which is itself growing, but the overall growth of the whole virtual reality market remains below the expectations of the industry. The mobile label ForwardWorks is also in a similar situation due to delays in the release of games, and the fact that the business is still in its infancy, which means that investment is required before it takes off. Going forward, Sony will aim for stable growth with a realistic outlook for these businesses, alongside PlayStation Vue.
Interestingly, Kodera’s presentation ended mentioning that in the era of the original PlayStation, the company aimed to sell millions of units, now they aim to engage millions of monthly active users.
If you’re interested in reading more about PlayStation’s financial performance, you can check out our article dedicated to the results of the past fiscal year. You can also see the relevant slides of Kodera-san’s presentation below, including interesting data and graphs.
If you still don’t have a PS4 you can grab one on Amazon.
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