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Sony prepares for the "final phase" of PlayStation 4's life-cycle

Growth of PlayStation Network is now a priority, while VR market has grown slower than SIE expected

Sony's management has told investors that it is now entering the final phase of the PlayStation 4's life-cycle, with the company as a whole primed to focus on expansion of the PlayStation Network.

CEO Kenichiro Yoshida led a presentation in which Sony's management team laid out its mid-term strategy for analysts and investors. For the Game & Network Services division, the financial target is between ¥130 billion and ¥170 billion operating profit by the end of March 31, 2021 - and Sony's executives suggested that services and not hardware would be the primary source of that money.

According to statements from Wall Street Journal reporter Takashi Mochizuki, who attended the event, Sony Interactive Entertainment John Kodera said that PlayStation 4 was entering "the final phase" of its lifecycle, with unit sales set to decline from here on.

In an official statement about the strategy, Sony emphasised the importance of expanding the audience for PlayStation Network, which has annual sales exceeding ¥1 trillion and more than 80 million MAUs. Key metrics used to measure progress will be frequency of logins and time spent per session, while Sony also said it aims to increase subscriber numbers for PlayStation Plus.

Kodera said that Sony would be investing in more exclusive games for PlayStation platforms, including both new IP and refreshing existing IPs. However he described the period leading up to March 2021 as a time for SIE to "crouch down" while preparing for more growth after that point.

PlayStation VR was given a more measured appraisal, with Kodera stating that VR's growth is below market expectations. Indeed, in slides accompanying the presentation, PSVR was placed alongside PlayStation Vue and the mobile-focused ForwardWorks as challenging areas in need of improvement.

At the end of his presentation, Kodera moted that Sony's perspective on the games business has shifted, from emphasis on selling millions of units to an emphasis on engaging millions of MAUs.

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