Sony Explains Sony Interactive Entertainment’s Formation; Aims to Connect “At a Very Deep Level” with Customers
During his presentation at Sony Corporation’s Investor Day, Sony Interactive Entertainment President Andrew House talked about the reasons that led to the formation of Sony Interactive Entertainment by merging Sony Computer Entertainment and Sony Network entertainment, and more.
House explained that when he took the helm of the network services business, one of the things he decided to do was to revise the strategy for network services. Historically, Sony Network Entertainment was established with a view to creating network services as “device enhancers”ubiquitous to the whole range of Sony devices and with a large geographical footprint.
House elected to change that strategy and returning the network services business to being PlayStation-centric and largely centered about sony’s strength in games. It’s his “firm belief that strategy should therefore be reflected in organization” and the next logical step was to combine the two entities into one single entity..
That, according to House, Yields three benefits: first of all, there is a single focus on games and network services from a single organization, it also allows the company to offer a “seamless end-to-end hardware to network experience”for the consumers, and it allows for accelerated business decision making and allocation of resources.
Sony is “pleased” that the transition has been undertaken “very smoothly.”
The net result of that is also a single culture, with 7,500 employees who have a single focus of delivering “more joy through play” to consumers. That’s Sony Interactive Entertainment’s mission.
House then moved to illustrate Sony’s strategy for the future, with the intention to capitalize on opportunities enabled by the growth of digital content consumption, and ensuring future growth by making investment at the right time and with the right scale.
Sales for packaged media are growing, even if slowly, while recurring businesses like game downloads, games as a service and more are showing significant growth. This second factor is a “huge benefit” for Sony as a platform holder, because the transactions associated with it go through the PlayStation Store, and are under Sony’s control.
The goal for PlayStation Plus is to broaden the audience so that it’s not as dependent for online multiplayer games as its sole key feature. Ultimately, Sony’s growth will be ensured by the degree with which they can leverage both package and network download business together. That allows them to have the best distribution channels to reach the broadest base possible, letting them consume content in the way that they wish.
We also hear that Sony is committed to continue to develop original content, whether it is games, television, or film. It helps the company to broaden PlayStation’s platform appeal beyond the pure gaming offering, it differentiates it away from the competition, and a broad content portfolio strengthens PlayStation as a content brand.
Incidentally, earlier in the morning during the company’s corporate strategy meeting, CEO Kazuo Hirai mentioned that the key to delivering “Kando” (emotion) for PlayStation is to connect with as many customers as possible at a “very deep level.”
Talking about the whole company, Hirai also mentioned that while there is a belief that in this age of advanced networks all added value stems from the cloud and network services, while hardware has become commoditized, he believes that while the required functions of hardware change over time, its importance as the touch point with customers is something that doesn’t change.
Sony’s strength lies in the ability to deliver products at the closest point of contact with customers, resonating with them at an emotional level.
Last, but not least, Hirai-san explained that in the telecommunications industry there is an expression describing “the last one mile.” According to him, Sony needs to be a presence at the “last one inch” for the customer.