An out of context quote from Sony Senior Vice President Sadahiko Hayakawa has sent shockwaves through the PS5 fan base yet again.
In the aftermath of the Japanese giant’s latest earnings report, Hayakawa answered a question from newspaper Nikkei involving the company’s recent investment in Bandai Namco and its aggressive focus on IP expansion.
In his translated response, he mentioned that the company is “moving away from a hardware-centric business to [a] community-based engagement business”.
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In the aftermath of the platform holder’s decision to port Helldivers 2 to Xbox Series X|S, as well as the firm’s recent recruitment of a Senior Director of Multiplatform, many are taking this quote as confirmation that PlayStation is abandoning exclusivity.
However, the full translated transcript offers much more context than the social media reaction may lead you to believe:
“Thank you very much for the question. So the investment in Bandai, and of course, we have been shifting to creation. So, for example, the entertainment businesses basically account for 60% of our consolidated revenue. So basically, our business portfolio is shifting more to the creation.
And then as for the electronics business and TV, compared to output devices, we are now shifting to creation devices that include digital camera. So as a result, we are seeing more stability in profitability and in revenue, and also the productivity of our performance is increasing. And against such backdrop, and for example, in the music business, music streaming and EMI Music Publishing has been acquired, and then we increased the music catalogue.
And as I mentioned in the speech, in gaming business and moving away from a hardware-centric business to more to the community-based engagement business, and then that has been increasing. So, now as we make more transition to entertainment creation, the stability and the productivity, our performance is increasing. So this upward revision might not have been a direct result of these. However, the music Publishing and also acquisition of a music catalogue and also the acquisition of Crunchyroll, these are the areas where we are seeing growth. And as a portfolio, we have been expanding our businesses and also improving our profitability.”
So what exactly is Hayakawa talking about here?
Well, his response is a bit of a word salad, but effectively he’s reiterating that Sony is no longer strictly an electronics organisation, as it now generates 60% of its revenue from entertainment, including music and games.
The company has talked extensively in the past about how it’s less focused on pure hardware sales, and it considers monthly active users a more important metric at this stage.
Moreover, it’s focused on expanding the reach of its gaming brands globally by bringing them to different mediums beyond PlayStation, including highly successful projects like The Last of Us television show.
Some of this includes taking its games to other platforms, as it’s been eyeing mobile for ages and of course has started porting the majority of its titles to PC. And yes, we’ve seen some of its software announced for the likes of Xbox and Nintendo Switch.
But as always, it’s a delicate balancing act Sony itself recognises. Earlier in the year, PS Studios boss Hermen Hulst said the company needs to be “really thoughtful about bringing our franchises off-console”.
As part of its earnings report, the manufacturer revealed astonishing profits for its PlayStation business, tallying a record-breaking $1 billion of operating income for the three month period ending 30th June.
The vast majority of that money was powered by its highly successful console, which has now surpassed 80 million units worldwide.
So yes, while Sony is undoubtedly diversifying and trying to increase the reach of all its brands, this encompasses a variety of initiatives as it begins to consider its success based on more than just raw console sales numbers.