Sony's Ambition Embracing Online Streaming in Japan... Building an Ecosystem of 'Content Production + Distribution'

US AT&T Acquires Anime Streaming Company 'Crunchyroll' for $1.175 Billion
Establishes Online Content Distribution Platform... Declares 'Second Founding' with Organizational Restructuring Combining Entertainment, Film, and Music Businesses
Chairman Yoshida: "We Will Build a Technology-Based Entertainment Company"

[Asia Economy Reporter Kwon Jae-hee] Japanese Sony, which transformed from an electronics powerhouse to a content company, is attempting another transformation. As the subscription economy has become a major trend in IT, Sony is shifting its management focus from merely 'content development' to expanding its online market dominance through 'distribution.'

This intention is evident in Sony's recent acquisition of the U.S. animation-focused online streaming service (OTT) Crunchyroll from AT&T for $1.175 billion (approximately 1.2761 trillion KRW). Sony finalized this deal after U.S. antitrust authorities gave their approval following several months of review.

Sony produces and supplies popular content such as "Demon Slayer" through its animation subsidiary, Aniplex. However, due to weak distribution channels, it has relied heavily on external OTT service providers like Netflix. According to The Wall Street Journal (WSJ), Crunchyroll has about 3 million subscribers and 90 million registered users. Although this scale is far smaller compared to major online streaming companies like Netflix and Disney+, it is significant for Sony as it establishes a foothold for distributing online content. WSJ described the acquisition as "Sony adding Crunchyroll to its vast library of animation and TV shows," meaning a massive collection of content now has a channel to reach external audiences. The Nihon Keizai Shimbun also analyzed that "Sony's acquisition of Crunchyroll is a move to establish a content platform and simultaneously anchor the entertainment business as Sony's core operation."

Sony's commitment to focusing on the subscription economy through strengthened content distribution is also reflected in the remarks of Kenichiro Yoshida, Sony's Chairman and CEO. Yoshida, who transformed Sony from an electronics company into a comprehensive content enterprise, defined Sony last month during organizational restructuring and executive appointments as a "creative entertainment company guaranteed by technology." This shows his determination to continuously stimulate consumer demand while focusing on content development.

Sony plans to change its corporate name to Sony Group in April next year and has announced an organizational restructuring that will combine Sony Interactive Entertainment with its music and film businesses.

This future vision did not come about overnight. Sony has steadily worked on content distribution. It acquired a 60% stake in the record label EMI Music Publishing from the Abu Dhabi investment company Mubadala for $2.3 billion and purchased a 39% stake in the animation character Snoopy from Canadian DHX Media for $185 million.

Interest in game content is expected to become even more prominent. Last month, Sony attracted massive attention by launching the fifth PlayStation after seven years. PlayStation has been the key item in Sony's transformation into a content company, and the fifth generation release caused significant stock price fluctuations. Sony's stock price, which was in the high 6,000 yen range in June, surpassed 9,000 yen per share on the launch day, July 12. It has risen more than 30% this year alone. Sony's game division sales are expected to surpass its electronics division for the first time ever this year. With PlayStation 5 expected to sell 7.6 million units within two months of release, there is strong anticipation that game sales growth will be even more pronounced next year. Sony also forecasts that operating profit from entertainment sectors such as games, movies, and music will reach 500 billion yen in 2020, accounting for about 70% of total operating profit, establishing these as core businesses.

The expansion of PlayStation 5 also supports building a subscription economy, as it enables online service connectivity. Sony's paid online gaming service, PlayStation Plus, had 45 million members worldwide as of the first half of this year. This is three times the 15 million subscribers of competitor Microsoft’s Xbox Game Pass.

Sony is preparing for a second founding with the organizational restructuring scheduled for April next year. In particular, it aims to strengthen the electronics division, which has lagged behind games in sales this year. Sony recently appointed President Kimio Maki as head of the electronics division, explaining that "through generational change, we will continue the innovation DNA and entrepreneurial spirit." In line with Maki’s appointment, Chairman Yoshida said, "This personnel move signifies the continuation of reform efforts," entrusting him with redefining the electronics business division, which has become less significant in terms of profitability. It is expected that he will emphasize healthy competition and cooperation between the entertainment and electronics divisions.

The Nihon Keizai Shimbun recently evaluated the executive appointments by stating, "Sony is challenging a second founding," and that it "means passing on the will for reform to the next generation."