Sony Aims to Expand PlayStation Network Business and to “Aggressively” Promote Mobile Games
Having passed the peak of hardware profitability, Sony aims to expand its PSN business and to push mobile games to bolster the music segment.
During Sony’s financial conference call for the fiscal year ended on March 31st, Chief Financial Officer Hiroki Totoki gave more information on the company’s gaming businesses.
The installed base of the PS4 and the expansion of network revenue have driven profit growth. As a result, it’s important for Sony to further expand the “stable” network services business model along with the current business model centered on hardware penetration and software attach ratios.
Previous console cycles show that software profitability normally peaks one year after hardware and after the peak, the company needs to grow the PlayStation Plus subscription business and recurring business. Network-oriented game experiences have to be offered, and Sony is already doing that, on top of additional downloadable content and in-game purchases.
At the moment, according to Totoki-san, there is a very strong momentum for software sales. Network services are also expanding, providing a good tailwind that Sony should ride on.
Interestingly, Sony Interactive Entertainment isn’t the only segment of the company that is strongly influenced by games. Sony Music Entertainment’s sales have generated significant growth partly thanks to the strong performance of Fate/Grand Order for iOS and Android. We learn that mobile games accounted for about 30% of the operating income of the whole segment.
Sony believes that it needs to continue to “aggressively promote” mobile games as part of the strategy to leverage anime IPs.
If you want to read more of Sony’s financial performance and PS4 hardware and software shipments, you can check out our dedicated article. Today, we also got an update on PlayStation Plus subscribers.
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