Edit - for clarity, the thread title is not mine, and I feel it's a bit clickbaity. He was placing the console business in-context of the entire gaming pie... not suggesting it was 'small' in absolute terms. His follow-on comments affirm the importance of consoles for themselves and the 'core gamer'.
Transcribed from the Corporate Strategy presentation held today: https://www.irwebmeeting.com/sony/fast/20190521/k7a24dmc/strategy2019_02_en/index.html
The translation, particularly on the last answer, was a bit wonky at times.
Transcribed from the Corporate Strategy presentation held today: https://www.irwebmeeting.com/sony/fast/20190521/k7a24dmc/strategy2019_02_en/index.html
The translation, particularly on the last answer, was a bit wonky at times.
Q: Concerning your collaboration with Microsoft, what is the likely size of money, and the size of the business? For instance, in the game business, how much would it account for in terms of the size of pie? In concluding such MoU, probably the numbers are not technically there yet, but in terms of size of business, what is your anticipation or forecast of the likely size of operation?
A: Thank you for the question. On our collaboration with Microsoft, and the likely size of it we have in mind, at this point in time in order to have a broader and deeper discussion we have signed a MoU. Over the long term the cloud and streaming services trend will mature, but it is very difficult to ascertain the timeline. We've been working with streaming services over the last 5 years, and there are various difficult aspects. The latency of network for one. Some examples I could cite, for instance, the typical means of minimising latency is placement of servers on the edge closer to users - but moving servers closer to one group of users can mean increasing latency for another group of users. And also, there will be an encoding process at the very end, and how we can minimise the time for compression is another challenge. And also, in order to make it a viable business, what would be the business model? Our service is a subscription model now, but depending on the game...one game could be played for 50 hours or 100 hours, and for someone playing one game like this, what is the advantage of a subscription service per month, the all-you-can-play type of model? So in terms of technology and services, there are various aspects we would like to look into with Microsoft going forward, especially in terms of streaming solutions. We would like to proceed through collaboration. On our side, Katsumoto next to me (SVP, Officer in charge of R&D), will be leading the initiative, and continue to carry out discussions.
Q: You have talked about the partnership with Microsoft, in the gaming industry which is a very important business for you. As you look at the future of the
game industry, the importance of the console business, what is your outlook for the importance of that?
A: As we speak, we provide, as I said, the immersive business and experience is something we would like to continue to place importance on. If you look at the game industry as a whole, the console market is not a major market, rather it's a niche market, if you will. But for core gamers, immersive experiences are something we would like to value. In this respect, for the time being, the console as something that brings about computing functionality to the users is very important, but on the other hand, technology will progress, and so as I said today, the Remote Play and PlayStation Now, the streaming services will be worked on in parallel, that is what we are doing at this moment.
Q: Earlier you talked about immersive and seamless. For the last several years, Sony has collected data, user engagement metrics (ARPU) - but what is the trend, is it uptrending or in stalemate? For the next 3 years, when we look at the next generation console, the cloud environment, if we take these into consideration, what are the drivers of growth? Is it ARPU? Or MAU? Or both? If you could share with us the recent situations, and your outlook for the next 3 to 5 years, please share with us your outlook on the growth potential of the gaming business.
A: Thank you for your question on the game business. You mentioned user engagement, that is the most important thing. There are several ways to measure this. At Sony, MAU is something we focus on as important. The contact points of the users, and depth of such contacts is important - how much time is this user using, how much money is he or she spending. Depth and width of the touch point with the user is so important. For the last several years it has been increasing upward quite quickly. The asset base we have now, that is something we hold dear. In the next generation console, that remains unchanged. In that sense, the community of interest exists even now, but we would like to refine and improve the community of interest, and we will take measures to improve that. Discussions are going on within management of SIE now.
Q: Just the other day you had a partnership announced with Microsoft. When it comes to collaboration, your stance as a whole company, you are getting more active in terms of collaboration, is this correct? And, with respect to technology, content, user expansion in various ways, I think you are working on collaboration, but which field are you going to focus on with respect to the expansion of existing businesses and leading to new businesses?
A: Well, [not just with regard] to Microsoft, but for the company, I have discussed with Mr Katsumoto sitting next to me, we would like to expand the range of technology. That is certainly what we are working on, for entertainment and financial services. And also we would like to focus on our strengths, and that is something we are doing aswell. And so, around our strengths, we would like to gather our partners. We alluded to AI, and that is what you can think about in connection to this. Now regarding the tie-up with Microsoft, as was already announced, particularly for streaming services, we are going to collaborate with each other. So <inaudible>, so of course we are going to continue to compete, but when it comes to streaming solutions, in this field collaboration will happen, that will require technology also, investments and partnership with companies would be the most optimal alternative.
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