Behind the Acquisition: Sony’s Strategy in the Web3 Era
On July 1, Amber Japan officially rebranded to S.BLOX. After being acquired by the subsidiary of Singaporean market maker Amber Group in February 2022, and later by Sony Group’s wholly-owned subsidiary Quetta Web in August 2023, the company operating the cryptocurrency trading service platform “WhaleFin” has become a part of the Sony Group.
Sony, whose mission is to “Fill the world with emotion, through the power of creativity and technology,” has business segments spanning gaming and network services, music, film, entertainment, technology and services, and imaging and sensing solutions, as well as medical and financial services. To highlight these major industries under its umbrella, Sony Corporation was renamed “Sony Group Corporation” in April 2021, the first name change in over 60 years.
Among its various businesses, Sony’s gaming and network services, music, and film entertainment sectors have rapidly developed over the past decade. In the fiscal year 2021, their combined revenue accounted for more than half of Sony Group’s consolidated revenue, and their combined operating profit made up two-thirds of the group’s total profit.
With the evolution of blockchain technology and the rise of the metaverse and NFTs, especially relevant to entertainment products, Sony has cautiously started exploring and expanding into the Web3 field.
The Metaverse of Sony
The concept of the “metaverse” became a buzzword in 2021, entering the vision of many industry enterprises, including Sony. In its corporate strategy for the fiscal year 2022, Sony anticipated growth in the metaverse and planned to create new entertainment experiences in this field.
Sony CEO Kenichiro Yoshida revealed that the metaverse is a social and real-time network space intersecting gaming, music, movies, and anime, expressing interest in launching more metaverse-experienced products for users.
After targeting the then-popular metaverse sector, Sony quickly made moves. In February 2022, it signed a three-year partnership with Premier League champions Manchester City to create the world’s first metaverse football stadium.
In April, it was revealed that Sony and LEGO’s family investment company KIRKBI each invested $1 billion in Epic Games, placing a significant bet on the metaverse. At the end of the same year, Sony acquired AI-based data analytics and visualization company Beyond Sports, positioning it as a metaverse sports portal providing real-time digital sports engagement solutions for leagues, broadcasters, brands, and end consumers.
NFTs
There is no unified definition of what constitutes the metaverse or the technologies it encompasses. In many envisioned futures of the metaverse, NFTs with interoperability and digital asset properties are essential elements, believed to bring true digital ownership, economic activities, and social interactions to the metaverse. Consequently, Sony has shown keen interest in the NFT sector since 2022.
In April 2022, Sony subsidiary Sony Network Communications established an NFT business company in Singapore, a joint venture with software development company Sun Asterisk, with Sony Network Communications holding a 70% stake. The new company aims to maximize value for customers, creators, and end-users by utilizing NFT technology in Web3.
According to its website, the company’s services include “NFT business strategy planning support,” “NFT issuance support,” “unique token issuance support,” “NFT game development support,” and “NFT promotion support.”
Sony Music, another division under Sony, began exploring NFT applications as early as 2021, participating in a $30 million Series A funding round for NFT marketplace MakersPlace. In 2022, Sony Music first collaborated with Solana-based NFT platform Snowcrash (later pivoted to AI-driven music creation) to launch a series of NFTs featuring legendary artists like Bob Dylan.
It then established RCA Records’ Greater China division to explore opportunities in streaming, NFTs, and the metaverse, signing artists like Jackson Wang and A-Lin. Sony Music also filed NFT-related trademark applications for Columbia Records’ logo, planning to use it for NFT-supported media, music and podcast production, artist management, and music distribution services.
In the gaming sector, Sony has focused on developing NFT-related patents, including “Tracking Unique In-Game Digital Assets Using Tokens on a Distributed Ledger” and “NFT Framework for Transferring and Using Digital Assets Across Gaming Platforms.”
The former describes systems and technologies for tracking digital assets across different hardware platforms and publishers, while the latter explores a method for cross-platform use and trading of NFTs. Sony has also expressed plans to build an NFT and blockchain system applicable to the PlayStation (PS) platform ecosystem.
Infrastructure
In 2023, Sony seems unsatisfied with merely developing NFT technology, further expanding its business scope in the blockchain and Web3 industries.
Early in 2023, Sony Network Communications partnered with multi-chain smart contract network Astar Network to launch a Web3 incubation program focusing on NFT and DAO utility projects, running from March to June.
Selected projects may receive investment consideration from Sony Network Communications. This program was organized by Singapore-based Startale Labs, Astar Network’s development company founded by Astar CEO Sota Watanabe.
After the Web3 incubation program ended, Startale Labs secured a $3.5 million investment from Sony Network Communications. In September, the two parties deepened their cooperation by establishing a joint venture, “Sony Network Communications Labs Pte. Ltd.,” focusing on blockchain technology research and development.
Sota Watanabe indicated that the new joint venture will advance the development of Sony Chain, which has the potential to surpass Coinbase’s recently launched Layer2 network, Base.
Earlier this year, Startale Labs raised an additional $3.5 million in a follow-up Series A funding round, with investors including UVM Signum Blockchain Fund, Sony Network Communications, and Samsung Next Ventures, valuing the company at $63.5 million.
Furthermore, according to Singapore’s business information platform BIZFILE, Sony Network Communications’ shares in Startale Labs have been transferred to Sony Group, symbolizing blockchain’s elevation within Sony’s business strategy.
Finance
In 2024, Sony expanded its financial services into the cryptocurrency industry.
In March, Sony Financial Group’s Sony Bank announced plans to launch “Sony Bank CONNECT” in summer 2024. This new smartphone app aims to provide privileges to digital securities and NFT holders, designed to offer users simple and secure access to exciting experiences. The app will connect to the marketplace operated by SNFT Inc., allowing users to display and enjoy their NFTs held within SNFT.
With the product launch, Sony plans to offer digital content to customers who have participated in past events and obtained NFTs, purchased specific digital securities, or completed surveys. Additionally, they are developing a blockchain-based wallet and plan to expand its features based on customer feedback after launch. Sony Bank stated, “Sony Bank CONNECT will continuously expand its functions to meet customer needs, contributing to the future development of the web3 entertainment field in Japan.”
In April, Sony Bank began a proof of concept to issue stablecoins pegged to fiat currency, conducting the trial on the Polygon blockchain. Reportedly, Sony is exploring stablecoin use to promote its intellectual property in gaming and sports due to the advantages of reduced payment and remittance fees. The stablecoin trial will assess any legal issues associated with transferring yen-backed stablecoins and is expected to last several months. The development will be handled by Belgium-based blockchain company SettleMint.
The latest development in Sony’s cryptocurrency and financial business is the acquisition of Amber Japan by Sony and its rebranding to S.BLOX. Future plans include UI redesign, new app releases, and expansion of supported currencies and features.
Since 2021, Sony has continually expanded its exploration boundaries in Web3, from the metaverse and NFTs to building infrastructure public chains and engaging with cryptocurrencies. For a large entertainment group like Sony, cautiously integrating emerging technologies into its business segments avoids excessive risk while staying ahead of the curve. This attitude of embracing new technologies may be the key to its longevity spanning over 60 years.