On July 1st, Amber Japan officially changed its name to S.BLOX. After being acquired by Amber Group, a subsidiary of Singapore market maker Amber Group, in February 2022, and then fully acquired by Quetta Web, a wholly-owned subsidiary of Sony Group, in August 2023, the company, which operates the cryptocurrency trading service platform “WhaleFin,” officially became part of Sony Group.
Sony, with the motto “Inspire the World with Creativity and Technology,” has business sectors that cover the “Inspire” gaming and network services, music, film and television, the “Connect” entertainment, technology and services, and imaging and sensing solutions, and the “Support” medical and financial services. In order to highlight the functions of the major industries under this group, which covers financial services, gaming, and entertainment, Sony Corporation was renamed “Sony Group Corporation” in April 2021, the first name change in over 60 years.
Among the various businesses, Sony’s gaming and network services, music, and film and television entertainment businesses have developed rapidly in the past decade. In the fiscal year 2021, their overall revenue exceeded half of Sony Group’s consolidated revenue for the first time, and their overall operating profit accounted for two-thirds of the Group’s consolidated profit. With the development and iteration of blockchain technology, especially the rise of metaverse and NFTs closely related to entertainment products, Sony has also begun to cautiously explore and expand into the Web3 field.
Metaverse
As a hot term in the tech industry, the concept of “metaverse” entered the vision of many industries and companies in 2021. Sony, as an entertainment giant, is no exception. In its 2022 fiscal year strategy, Sony expects growth in the metaverse and plans to create new entertainment experiences in this field. Sony CEO Kenichiro Yoshida also revealed that the metaverse is a social space and real-time network space where games, music, movies, and animation intersect. Sony is interested in launching more products that provide metaverse experiences for users.
After targeting the metaverse track, which was hot at the time, Sony quickly made moves. First, in February 2022, it signed a three-year partnership agreement with English Premier League champion Manchester City to jointly create the world’s first metaverse football stadium. Later, in April, it was revealed that Sony and KIRKBI, the investment company behind LEGO, each invested $1 billion, totaling $2 billion, in Epic Games, placing a big bet on the metaverse. At the end of the same year, Sony acquired AI-based data analysis and visualization company Beyond Sports, positioning it as a metaverse sports portal that provides real-time digital sports participation solutions for leagues, broadcasters, brands, and end consumers, and provides sports content from traditional media to metaverse communication.
NFT
There has been no unified consensus in the industry on what the metaverse is and which technologies belong to this concept. In the future depicted by many, NFTs with interoperability and digital asset attributes are essential elements of the metaverse, and this technology is believed to bring true digital ownership, economic activities, and social interactions to the metaverse. In the visible future, NFT technology has a wide range of applications in entertainment products such as games, music, and film and television. Therefore, Sony has been interested in the NFT track since 2022.
In April 2022, Sony’s subsidiary Sony Network Communications established an NFT business company in Singapore. The company is a joint venture between Sony and software development company Sun Asterisk, with Sony Network Communications holding a 70% stake. The newly established company aims to provide maximum value to customers, creators, and end users by leveraging NFT technology in Web3. According to the company’s website, its business includes “NFT business strategy planning support,” “NFT issuance support,” “unique token issuance support,” “NFT game development support,” and “NFT promotion support.”
Sony’s another sector, Sony Music, has been exploring the application of NFT technology since at least 2021 and participated in a $30 million Series A financing round of NFT marketplace MakersPlace in that year. In 2022, it first collaborated with the Solana-based NFT platform Snowcrash (now transformed into an AI-based music production platform) and announced plans to launch a series of NFTs by legendary musicians such as Bob Dylan. It also established the Greater China division of RCA Records to explore opportunities in streaming, NFT, and the metaverse, and signed contracts with singers Jackson Wang and Gigi Leung. It also submitted NFT-related trademark applications for the logo of Columbia Records, planning to use the trademark for NFT-supported media, music and podcast production, artist management, and music distribution services.
In terms of gaming, Sony is focused on developing NFT-related patents. The disclosed patents include “Tracking Unique Digital Assets in Tokenized Games Using a Distributed Ledger” and “NFT Framework for Transferring and Using Digital Assets Between Game Platforms,” with the former describing a system and technology that can track digital assets between different hardware platforms and different publishers and the latter exploring a method for using and trading NFTs across platforms. Sony also stated that it will build an NFT and blockchain system that can be applied to the PlayStation (PS) platform ecosystem.
Infrastructure
Entering 2023, Sony seems to no longer be satisfied with the development limited to NFT technology and has further expanded its business scope in the blockchain and Web3 industries.
In early 2023, Sony’s business division Sony Network Communications collaborated with multi-chain smart contract network Astar Network to launch a Web3 incubation program for projects focused on practical use cases of NFTs and decentralized autonomous organizations (DAOs). The incubation program took place from March to June, and the selected projects may be considered for investment by Sony Network Communications. The incubation program was organized by Startale Labs, headquartered in Singapore, which is the development company of Astar Network and was founded by Astar CEO Sota Watanabe.
However, after the conclusion of the Web3 incubation program, it was Startale Labs, the organizing party, that received a $3.5 million investment from Sony Network Communications. In September of the same year, the two parties further deepened their cooperation and established a joint venture subsidiary called “Sony Network Communications Labs Pte. Ltd.” The new company will focus on the research and development of blockchain technology. Sota Watanabe stated that the new joint venture subsidiary will promote the development of Sony Chain, which has the potential to surpass Coinbase’s previously released Layer2 network, Base.
At the beginning of this year, Startale Labs raised $3.5 million in a follow-on financing round, with participating investors including UVM Signum Blockchain Fund, Sony Network Communications, and Samsung Next Ventures, valuing the company at $63.5 million after the financing. In addition, according to Singapore’s business information platform BIZFILE, the shares of Startale Labs held by Sony Network Communications have been transferred to Sony Group, symbolizing another step forward in the blockchain’s business strategy at Sony’s level.
Financial
In 2024, Sony began to expand its financial services to the cryptocurrency industry.
In March of this year, Sony Bank, a subsidiary of Sony Financial Holdings, announced plans to launch “Sony Bank CONNECT” in the summer of 2024. This new smartphone application aims to provide privileges to holders of digital securities and NFTs, designed to allow any user to access exciting experiences easily and with peace of mind. The app will be connected to the market “SNFT” operated by SNFT Co., Ltd., where users can display and enjoy the NFTs they hold in SNFT.
With the product launch, Sony plans to provide digital content to customers who have participated in past activities and obtained NFTs, purchased specific digital securities, or answered surveys. In addition, they are also developing a blockchain-based wallet and plan to expand its features based on customer feedback after the release. Sony Bank stated that “Sony Bank CONNECT will continuously expand its functions based on customer needs after the release, contributing to the future development of the web3 entertainment field in Japan.”
In addition, in April of this year, Sony Bank began conducting a proof-of-concept to issue a stablecoin pegged to a fiat currency. This trial will be conducted on the Polygon blockchain. It is reported that Sony is exploring the use of stablecoins to promote the company’s intellectual property in the gaming and sports fields due to the advantages of reduced payment and remittance fees. Sony’s stablecoin trial will assess any legal issues related to yen-backed stablecoins and is expected to last for several months. The development will be entrusted to SettleMint, a blockchain company based in Belgium.
The latest development in the cryptocurrency and financial business is the acquisition and renaming of Amber Japan mentioned at the beginning. In April, it was acquired by Sony and renamed S.BLOX this month. The contents that will be reformed or optimized in the future include UI screen redesign, new application release, and the expansion of supported currencies and features.
Since 2021, Sony has been continuously expanding the boundaries of its exploration of Web3, from metaverse and NFTs to building infrastructure public chains and even getting involved in cryptocurrencies. For a large entertainment conglomerate like Sony, cautiously integrating emerging technologies into its various business sectors allows it to avoid being too radical and taking on excessive risks, while also avoiding being left behind due to excessive conservatism. This inclusive attitude towards emerging technologies may be the key to its longevity of over sixty years.
