SCE and Sony Network Entertainment Combine to Form Sony Interactive Entertainment

Posted on Jan 26 2016 - 10:19am by Shak

Sony Computer Entertainment Inc. (SCE) and Sony Network Entertainment International LLC (SNEI) announced the formation of Sony Interactive Entertainment LLC (SIE), a new company that joins the forces of all business units belonging to SCE and SNEI, including hardware, software, content and network services operations. SIE will be headquartered in San Mateo, California, the United States, while also establishing key global business operations in Tokyo and London, beginning Friday, April 1, 2016.

“By integrating the strengths of PlayStation’s hardware, software, content and network operations, SIE will become an even stronger entity, with a clear objective to further accelerate the growth of the PlayStation business,” said Andrew House, President and Global CEO of Sony Computer Entertainment Inc. and Group Executive in charge of Network Entertainment of Sony Corporation. “Along with our business partners, SIE will develop pioneering services and products that will continue to inspire consumers’ imaginations and lead the market. We will work hard to maximize corporate value by coordinating global business operations across San Mateo, Tokyo, and London by leveraging local expertise.”

| Background and Purpose behind Establishment of SIE LLC

SCE, established in November 1993, first launched the original PlayStation system in Japan in December 1994, bringing a completely new market of entertainment through gaming. Since then, SCE has continued to innovate and introduce unprecedented features with every generation, including the current PlayStation 4 system, and has revolutionized the world of computer entertainment. Furthermore, SCE has delivered compelling gaming experiences to users worldwide on each PlayStation platform through features that are available on the high-performance hardware developed by the company, and brought to life by the wide variety of highly acclaimed software titles from SCE Worldwide Studios and third party developers and publishers.

SNEI, established in April 2010, has been providing a robust portfolio of unparalleled network services through the premium entertainment service brand, PlayStation Network. SNEI’s offerings include game-related services, such as PlayStation Store, a premier destination for users to purchase digital games and other gaming content; PlayStation Plus, a membership service that provides a wide array of exclusive gaming features and content; and PlayStation Now, a streaming game service that allows users to enjoy a wide range of PlayStation 3 games on various network-enabled devices. Other innovative network services available on PSN include PlayStation Vue, a pioneering cloud-based TV service that reinvents the television experience; PlayStation Video, a video-on-demand and transactional service that enables users to enjoy an in-depth catalog of movies and TV shows; and PlayStation Music, a music listening destination that offers Spotify’s best-in-class music experience.

Since its launch in November 2013, PlayStation 4 continues to demonstrate record-breaking global expansion and growth, while PSN, which began full scale operation in November 2006, continues to expand with new offerings reaching millions of users every day. At the same time, the market environments of hardware, software, content and network services are ever evolving, and it has become important for both SCE and SNEI to unify their business strengths under one entity with a single focus, ensuring PlayStation continues to offer ground-breaking entertainment experiences to consumers around the world.

Through the formation of SIE, the companies combine resources across their hardware, software, content and fast-growing network businesses, positioning the company for enhanced competitiveness, continued expansion and market leadership in all areas. SIE will better respond to the needs of consumers and the evolving digital market to deliver unparalleled interactive entertainment experiences under the PlayStation brand.

| Corporate Strategy and Financial Target

Key corporate strategies of SIE are: retain and expand PlayStation user engagement, increase Average Revenue Per Paying Users (ARPPU) and drive ancillary revenue. SIE will vigorously expand the PlayStation business by delivering an integrated experience built around best-in-class games and network services to consumers worldwide.

Furthermore, as the Game and Network Service segment within Sony Group, SIE will work on expanding sales and operating income, and continue to target 1,400 to 1,600 billion yen for sales, and 5 percent to 6 percent operating income margin for the Fiscal Year ending March 2018.rcent operating income margin for the Fiscal Year ending March 2018.