TOKYO -- Sony Group plans to spend 2 trillion yen ($18 billion) during the next three years to secure a dominant position as a gaming and anime provider and to expand its sensor business.
"When it comes to financial strength, our investment capability has increased," President and CEO Kenichiro Yoshida said on Wednesday during the conglomerate's annual corporate strategy meeting.
Sony expects to make 2 trillion yen or more in strategic investments through March 2024, according to its midterm business plan. That represents an increase of more than 40% compared to the past three years. The investments will be funded by 3.1 trillion yen in consolidated operating cash flow that the group, excluding its financial services segment, expects to generate during the same period. It also plans to increase capital expenditure by 25% to 1.5 trillion yen.
Sony's gaming and anime business is supported by a strong intellectual property portfolio, which includes the "Demon Slayer" anime movie that has smashed box office records in Japan and the U.S.
The company intends to leverage its IP by developing a game based on Demon Slayer and by making movies and TV Shows that are based on games. It is already working on an "Uncharted" movie based on the popular PlayStation game franchise.
Jim Ryan, president and CEO of gaming unit Sony Interactive Entertainment, said 10 projects are currently in development.
Sony will also spend more to lure subscribers to its gaming services as well as to its anime and music platforms.
In addition, its entertainment subsidiaries will be expected to deepen their cooperation and collaborate more with outside partners.
"Sony is directly connected to about 160 million people in the world due to their desire to consume entertainment," Yoshida said. "I want to expand this number to 1 billion."
During the past few years, Sony has become more acquisitive. Last year, it announced plans to acquire U.S. anime streaming service Crunchyroll for $1.2 billion. In April, it revealed plans to purchase Brazilian independent music company Som Livre. Earlier this month it completed the acquisition of London-based indie music distributor AWAL.
It is likely that Sony will continue its aggressive acquisitions of entertainment-related businesses in a bid to broaden its user base.
Yoshida also spoke of Sony's "big" potential to grow its user base in India. Sony offers a direct-to-consumer video service in the country called SonyLIV, which focuses on the local culture. It has increased its paying subscribers to about 5.6 million, by about eight times in the twelve months through this April.
"In order to bring kando, or emotion, to even more users in the growing market of India, we plan to increase our content offering," Yoshida said.
In regards to gaming, the CEO said that one of the upcoming challenges for Sony will be its next-generation virtual reality system, which would likely incorporate "the latest sensing technology." Sony revealed in February that it is working on a new virtual reality headset for the PlayStation 5.
The company that got started by making radios and then made a name for itself with the Trinitron TV will also make strategic investments in the development of semiconductors, artificial intelligence and other cutting-edge technologies.
Sony, which controls a big piece of the global market for the image sensors used in smartphones, is working to strengthen its research into and development of automotive sensors. These include sensors for use inside vehicles as well as those that go into lidar systems, which send pulses of laser light to determine the presence, shape and distance of objects, often in great detail. They are integral to autonomous vehicles.
Yoshida also talked about the company's mission to develop the VISION-S electric vehicle.
Sony has so far made prototypes and performed public road tests, as well as verified the viability of 5G communications while driving at high speeds. "The more we learn, we realize there is even more to learn," Yoshida said. "We will continue to develop the VISION-S as an area of exploration. The field in which Sony can make the biggest contribution to mobility in the future is automotive sensing technology."
Meanwhile, some news outlets have reported that the Japanese government wants Taiwan Semiconductor Manufacturing Co. and Sony Group to invest 1 trillion yen to build Japan's first 20-nanometer chip plant.
Yoshida refrained from commenting on the reports but noted that, "in general terms, the stable procurement of semiconductors is important for Japan to maintain its international competitiveness."