Sony Group Corporation · TSE:6758
Sony — Investor Day (May 2021)
62 slides from Sony's investor day presentation, May 26, 2021
Slide 1: Corporate Strategy Meeting
Corporate Strategy Meeting May 26, 2021 Chairman, President and CEO, Sony Group Corporation Kenichiro Yoshida
Slide 2: Introduction and Purpose
Hello everyone. I am Kenichiro Yoshida. At the Corporate Strategy Meeting held in the first fiscal year I became President, I discussed management with a long-term view, a lesson I learned from one of our founders, Akio Morita, who would have been 100 years old this year. Looking back over the past
Slide 3: Today, I will talk about these three things
Today, I will talk about these three things. 3
Slide 4: 1. Review of History
1. Review of History The axis of Sonyʼs management is Kando and the subject of Kando is people. There have been no changes to these since 2012, when my predecessor, Kazuo Hirai, established the 1st Mid-Range Plan. I want to look back on the past nine years during which Sony has been operating with K
Slide 5: Structural reform of branded hardware business
First, in our branded hardware business, we implemented structural reform that liberated us from a loss-making paradigm, and we focused on premium products without pursuing scale. Structural reform was carried out at headquarters at the same time, and the actions we took in 2014 were a turning point
Slide 6: Focus on CMOS image sensors
The second important step we took was to focus on CMOS image sensors in our components business. We began by divesting other parts of our components business, such as batteries. Then, we concentrated investment in CMOS image sensors where Sony has a strong competitive advantage. Even during the 3rd
Slide 7: Investment in content IP and DTC services
The third step we took was to invest in content IP and direct to consumer (or DTC) services, and our investment has accelerated over the past three years since the acquisition of EMI Music Publishing in 2018. This slide shows the major IP and DTC investments we have made. 7
Slide 8: PlayStation Network growth
The biggest achievement in the DTC space is the PlayStation™Network, which has continued to grow organically rather than through external investment. Our network sales in the fiscal year that just ended, during which the PlayStation®5 was launched, increased almost tenfold compared to the fiscal yea
Slide 9: 2. Current State of the Sony Group
2. Current State of the Sony Group Next, I will discuss the current state of the Sony Group from the perspective of financial strength and group architecture. When it comes to financial strength, our investment capability has increased. 9
Slide 10: Operating cash flow by Mid-Range Plan
Consolidated operating cash flow excluding the Financial Services segment in each of the Mid-Range Plans has grown in the manner shown here, and the ability of the Sony Group as a whole to generate cash flow has increased significantly, contributing to the strengthening of our balance sheet. 10
Slide 11: Strategic investments by priority
Our strategic investments, in order of priority, have been in IP, DTC, technology, and Sony, in the form of share repurchases. 11
Slide 12: Market capitalization over nine years
1st MRP 2nd MRP 3rd MRP This slide shows our market capitalization over the last nine years. When managing Sony, I think it is important to invest with a long- term view to increase corporate value. 12
Slide 13: Strategic investments in 4th Mid-Range Plan
Our priorities for strategic investment will not change going forward, and we expect to make 2 trillion yen or more in strategic investments during the period of the 4th Mid-Range Plan. These investments will be funded by the 3.1 trillion yen in consolidated operating cash flow excluding the Financi
Slide 14: Goal of Sony's group architecture
The primary goal of Sonyʼs group architecture is to enhance collaboration. 14
Slide 15: New group architecture from April 1
On April 1st of this year, we began operating under a new group architecture which includes Sony Group Corporation. Since our founding, Sony has grown primarily because of the electronics business, but the overarching concept has always been Kando, which I mentioned earlier. To reflect this, Sony Gr
Slide 16: 3. Value Creation Around the Axis of Our Purpose
3. Value Creation Around the Axis of Our Purpose To this point, I have reviewed the nine years during which we operated around the axis of Kando. I have also described how we have enhanced our investment capability and our structure to facilitate group collaboration. As we look to the future, Kando
Slide 17: Kando value chain and services, mobile, social
However, for us to continue to evolve as a company that is preferred by creators and users, we need to better understand the motives of those creators and users and comprehend all the aspects of the process whereby Kando is created and delivered. In other words, we need to become experts in the Kand
Slide 18: Growth of subscription services
The trend toward services is continuing and subscription business models are driving the growth of the game, music and pictures entertainment industries. 18
Slide 19: Partnership with digital service providers
Sony plans to further strengthen our partnership with digital service providers while also expanding our own efforts to deliver emotionally-impactful content to users. 19
Slide 20: Music: mobile and social convergence
MUSIC Mobile connectivity through smartphones has become a piece of infrastructure through which entertainment is enjoyed and social engagement occurs as people connect to one another. In fact, mobile connectivity is causing entertainment to converge with social. 20
Slide 21: Hit songs born from social engagement
The hit songs from Lil Nas X and YOASOBI were born from social engagement. 21
Slide 22: Games and social convergence
And, in the games space, users are just as motivated to meet friends inside of games as they are to play the games themselves. Having converged games and social, Fortnite is seamlessly integrating the game, movie and music genres through the virtual concerts and movie promotions that regularly occur
Slide 23: Creativity, technology and the world
From here, I will discuss how we are creating value to evolve and grow Sony as a creative entertainment company going forward around the axis of our Purpose, focusing on the keywords of creativity, technology and the world. Let's start with the first keyword: creativity. 23
Slide 24: Creativity of creators
The creativity of creators brings life to works that lead to Kando. Earlier, I mentioned that the entertainment industry is becoming seamless. In fact, creativity has never had boundaries; creators have always demonstrated their talent in ways that transcend genre. Sony assists creators by providing
Slide 25: Demon Slayer movie
Demon Slayer: Kimetsu no Yaiba ‒ the Movie: Mugen Train, which generated more than 40 billion yen in box office revenue in Japan, the highest in history, is an example of this. The movie was produced after Aniplex converted the original comic into an anime TV series. And we gave a Sony Music artist
Slide 26: PlayStation Productions
We have also established PlayStation Productions. Working in close partnership with the film and television production teams at Sony Pictures, PlayStation Productions is hard at work making game titles into movies and TV shows. The hit PlayStation game Uncharted is currently being made into a film.
Slide 27: Acquisition of Som Livre
In April, we announced the acquisition of Som Livre, an independent music label in Brazil. We believe that owning Som Livre will enable us to provide new opportunities to the creative community in Brazil, which is one of the most dynamic and fastest-growing markets in the world. 27
Slide 28: Increasing points of contact with artists
In addition to these efforts, we are working to increase our points of contact with artists and creators. For example, in the music business, we collaborate with artists signed to our labels and with artists signed to independent labels through The Orchard. We also intend to proactively engage with
Slide 29: Technology
The second keyword is technology. Technology is indispensable to the Kando value chain. Here I will discuss both the technology that creators use to make their creations and the technology that users use to experience those creations. 29
Slide 30: Creation technology in audio and visual
Since its founding, Sony has accumulated a wealth of creation technology in the audio and visual spaces. 30
Slide 31: CMOS image sensors
CMOS image sensors are a core technology in the visual space. A key component of smartphones, these sensors are helping users transform themselves into creators around the world. We aim to continuously evolve our CMOS image sensors for mobile products through our cutting-edge stacked image sensor te
Slide 32: Alpha 1 camera
Our newest full-frame mirrorless camera, the Alpha 1, is the first in the Alpha series to realize 8K video recording and, in still mode, it has an improved Real-time Eye autofocus technology for human eyes, for animals, and now for birds. This capability is made possible due to the latest image proc
Slide 33: Hawk-Eye
Hawk-Eye is another example of the Sony Groupʼs real-time rendering technology. By enhancing the fairness and safety of professional sports, it is contributing to increased fan engagement. 33
Slide 34: Airpeak drone
And Airpeak is a drone built for creators that combines the imaging, sensing and robotics technologies of Sony. 34
Slide 35: Virtual production
In the area of virtual production, we have improved our camera and LED display technology to the point where this mode of film- making is becoming more widespread in the industry. And we are collaborating with EPIC Games in a variety of areas, including game engines that are indispensable to virtual
Slide 36: PlayStation 5 experiential technology
To enjoy emotionally-impactful content, users can leverage the experiential technology found in our suite of products, including those with audio and visual technology. Our latest achievement in the experiential technology space is the PlayStation®5. We have integrated multiple technologies into the
Slide 37: Next generation virtual reality headset
Our next challenge in the experiential technology space is virtual reality. Leveraging the knowledge we gained from PS VR, we plan to incorporate the latest sensing technology into our next generation headset. 37
Slide 38: Sony AI and PlayStation collaboration
And Sony AI, which we established last year, has begun a collaboration with PlayStation that will make game experiences even richer and more enjoyable. By leveraging reinforcement learning, we are developing Game AI Agents that can be a player's in-game opponent or collaboration partner. 38
Slide 39: The third keyword: world
From here, I would like to talk about the third keyword: world. For us, the word “world” is synonymous with all the people on the planet, and it refers to the community of creators and users connected to each other around the world. 39
Slide 40: Communities of interest
Increasing the number of, and expanding the scope of, communities of interest, where people share emotionally- impactful experiences and similar interests, is directly linked to our Purpose. 40
Slide 41: Anime and game DTC services
I will discuss this with a focus on the themes of services, mobile and social that I mentioned when discussing Sonyʼs operating environment. First, I will touch on our anime and game DTC services as examples of the communities of interest that Sony is fostering. 41
Slide 42: Funimation and Crunchyroll
In the anime space, we partner with DTC services to deliver the anime IP that Sony owns, such as Demon Slayer, to as many consumers as possible. But we also have our own DTC service, Funimation, which delivers Japanese anime content to anime fans around the world. Subject to the closing of the acqui
Slide 43: PureFlix and SonyLIV
Sony also has DTC services for communities of interest other than anime. One is PureFlix, a faith and family centered offering. Another is our video DTC service in India called SonyLIV which is rooted in local culture and has increased its paying subscribers to approximately 5.6 million by about eig
Slide 44: PlayStation Network game DTC service
Next is our game DTC service. The PlayStation™Network is the most important DTC service in the Sony Group because it has the largest community. Our priority here is to maintain and increase the engagement of the users in this community, and to expand the community itself. Currently, we are working t
Slide 45: Game content and studios
We are also working to deliver appealing content to the game community by strengthening our relationships with 3rd party game studios and developers as well as by investing in development of content in our 1st party game studios and by attracting new talent to those studios. 45
Slide 46: Mobile games from anime IP
In addition to what we do in the services space around anime and games, what we do in the mobile and social spaces will be crucial to expanding the world of people to whom we deliver Kando. I believe this is indispensable to the development of the PlayStation Community. First, I will discuss mobile.
Slide 47: Social convergence with entertainment
Next is social, which is making genres more seamless as it convergences with entertainment. Sony is already active in the social space as is shown on this slide. Greater social engagement has fundamentally changed how content is made and how it is disseminated, and it has affected more than just con
Slide 48: Making PlayStation more social
One of the next big challenges for Sony is to make the PlayStation more social. Our efforts in the services, mobile and social arenas are crucial to expanding the world that Sony will fill with emotion, and that is especially the case for PlayStation®. I have asked Jim Ryan, the head of the PlayStat
Slide 49: Remarks from Jim Ryan, SIE
＊Remarks from Jim Ryan, President and CEO, Sony Interactive Entertainment; At Sony Interactive Entertainment we embrace Sonyʼs purpose and the direction of “getting closer to people''. Our community has always been part of PlayStationʼs DNA. We have built a strong community by focusing on what we do
Slide 50: Collaborating to deliver Kando
Sony cannot fill the world with emotion on its own. We need to collaborate with external parties to bring Kando to as many people as possible. However, there are areas where we will deliver Kando directly on our own as well. We can get closer to more people and increase and expand communities of int
Slide 51: Connecting with 1 billion people
Currently, Sony is directly connected to about 160 million people in the world due to their desire to consume entertainment. I want to expand this number to 1 billion. As a company with the purpose of filling the world with emotion, we aim to grow the Sony Group by getting closer to these 1 billion
Slide 52: Mobility and VISION-S
Mobility Now I will discuss mobility. At the Consumer Electronics Show in 2020, I said that, after mobile, the next megatrend will be mobility. To contribute to the evolution of mobility, we have been developing an electric vehicle called the VISION-S. So far, we have made prototypes, performed publ
Slide 53: Automotive sensing technology
Since we announced the commercialization of our first CMOS image sensor for automotive use in 2014, we have been researching and developing technology such as sensors for the outside of vehicles, including those mounted on the front of the vehicle, sensors for the inside of vehicles, which are being
Slide 54: IoT and sensing technology
Our sensing technology can also contribute to the evolution of IoT. Networks connect people; but networks also connect things, and the connection of things together is the megatrend of IoT. In the IoT space, sensors that capture the real world are essential key components. The evolution of IoT will
Slide 55: Edge AI solution with CMOS image sensors
In order to make the IoT megatrend sustainable, it is necessary for the world to process data not only in centralized locations such as data centers but also in decentralized locations through AI. Sony has developed an edge solution that uses our CMOS image sensors to process the data that IoT gathe
Slide 56: Lower environmental impact of edge solution
This solution results in a lower impact on the natural environment because it significantly reduces the amount of data produced and power consumed by IoT devices. The solution also has positive implications for security and privacy. 55
Slide 57: Mobility and IoT contribution to society
We believe that the evolution of mobility and IoT that I just talked about can contribute to an increase in the productivity of society and to a healthier planet. 56
Slide 58: Contributions to people, society and the Earth
In addition to what I have just explained, the businesses within the Sony Group will take responsibility for, and make contributions to, people, society, and the Earth through activities such as those shown on this slide. 57
Slide 59: Summary and corporate culture
Today, I reviewed Sonyʼs past initiatives, discussed the current state of the company and articulated how we will create value to evolve and grow Sony as a creative entertainment company with a solid foundation of technology, all around the axis of our Purpose. Our business domains are centered on p
Slide 60: Closing and IR Day
And it is the role of the global management team, including myself, to lead this corporate culture. At the IR Day, which will be held for two days starting tomorrow, the heads of each of our business segments will talk about the direction of their businesses. To conclude my speech, I would like to s
Slide 61: SONY
SONY 60
Slide 62: Cautionary Statement
Cautionary Statement Statements made in this presentation with respect to Sony’s current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Sony. Forward-looking statements include, but are not li