"When asked about streaming, Sony discussed PlayStation Now, its cloud gaming service, which already provides low latency delivery. Although it is pleased with the service, which incorporates technology from the acquired assets of Gaikai and OnLive, it does not view it as a big part of its game business at present. It views streaming as more of a distribution play than a business model at present. It sees many predators circling its games strength at present, but believes that nobody has better technology than it does at present, a reflection of the billions of dollars that it has spent to differentiate the experience that it provides. In addition, Sony benefits from a walled garden of roughly 90 million monthly active users and PS4 consoles that should keep its competitors at bay for the time being. Over the past twelve months, almost 95% of Sony devices have communicated with its network, a reflection of the strong engagement of its user base.
Sony noted that the PlayStation platform remains heavily game-centric, and while there has been some takers for their music offering (for gamers wanting to listen to music while gaming), users coming to PlayStation for movies/TV content have been limited. It was noted that management will have to consider strategies for the business – whether to build it as a comprehensive entertainment platform, or as a comprehensive game platform – with an eye to developing subscription services and the user base. This is a key strategic question Sony is deciding currently...whether to build PSN as a comprehensive entertainment platform, or double down on games.
Regarding the struggling PS Vue business, Sony reiterated it was a supporter when the business was developed and launched, with a key attraction being the value of the data generated by viewers, rather than intrinsic profitability. Sony acknowledged that the sustainability of the business in the face of “power player” rivals must be a point of internal discussion. Sony Pictures management hinted at “interesting” plans for the business while acknowledging competitiveness of the space. Sony also wants to turn smartphone games into a cash cow business, and will continue efforts to ramp up SIE's investment in it.
Sony would not fully comment on whether the PS5 is in development, but did foresee a future for PlayStation beyond the PS4, which is on a ten-year cycle. It continues to believe that the PS4 can sell as many console units as the PS2 did over its lifetime, implying over 150 million units. Sony noted that they have yet to decide how much further to market the current console before launching a new console; the current G&NS targets exclude the impact of PS5. Sony has indicated that the timing of a PS5 has yet to be fully decided and has not yet been factored into Sony's three-year plan.
Sony views itself as having the largest developer network at present that is larger than those of Microsoft and Nintendo combined. Any future acquisitions are more likely to center on infrastructure and middleware than on individual developers. A primary goal is to extend the gamer population to the family. It sees a future for Sony’s mobile titles in China. Finally, it believes that outside expectations for virtual reality may have been overinflated, and that new AAAs will be needed to jumpstart sales. Developers will need to see an installed base of over 5 million units to become believers in PlayStation VR, a threshold that it may come close to this year."