Sony has outlined its medium-term strategy in a meeting with investors. The company plans to invest more in expanding its lead in camera sensors, as well as shift its gaming business to a streaming model, available across multiple devices and platforms. For smartphones and consumer electronics, the group will work on more cost savings and synergies, including with its content businesses.
The financial outlook focuses on the three-year period ending in March 2021. The company increased its target for cumulative operating cash flow in the period to at least JPY 2.2 trillion from 2.0 trillion, excluding its financial services arm. Capital spending will be focused on improving long-term profits, and is expected to grow to JPY 1.1-1.2 trillion during the forecast period, from an earlier estimate of JPY 1.0 trillion, due to greater investment in CMOS sensors. The dividend policy is unchanged, as is the plan to buy back up to JPY 200 billion in shares the current fiscal year.
Immersive gaming
For the Playstation business, Sony signaled a shift away from hardware to creating a more "immersive" and "seamless" gaming experience. The recent agreement with Microsoft is part of this strategy. The shift comes as new rivals on the gaming market are emerging, with subscription services planned from both Apple and Google.
PlayStation 4, which is expected to reach 100 million units in cumulative sales this calendar year, will evolve into a streaming game server, providing streaming content at the closest point to users, Sony said. The subscription service PlayStation Now also will be expanded to other users, without a PS4 console.
The group will continue to make a games console, focusing on a more immersive experience. This will be created by "dramatically increased" graphics rendering speeds, through further improvements in computational power and a customized ultra-fast, broadband SSD.
Cameras demand
The other big growth area for Sony is its CMOS sensors business. While around 80 percent of current sales go to smartphones and that market is maturing, Sony sees increased opportunities from the proliferation of multiple, larger cameras on phones, as well as new sectors such as automotives, industrial equipment and edge AI. Demand for Time-of-Flight sensors in smartphones is also expected to increase, which can be used to detect surrounding objects for purposes such as navigation, tracking, gestures and object recognition.
At the consumer electronics and professional solutions businesses, Sony has recently grouped these activities into a signal division, in order to drive cost cutting and improved margins. It hopes this will help strengthen existing businesses, including mobile, and facilitate greater synergies, across staff as well as products.
Finally, the content activities are expected to benefit from the growing number of subscription streaming services, giving Sony more ways to leverage its IP. Its Pictures division aims to leverage its position as one of the few remaining independent studios, as well exploiting its significant content library and synergies with other Sony activities.
