The crypto media outlet PANews reported on July 1 that Amber Japan was officially renamed S.BLOX. After being acquired as a subsidiary by Amber Group, a Singapore market maker, in February 2022 and subsequently acquired by Sony Group’s wholly-owned subsidiary Quetta Web in August 2023, the company operating the “WhaleFin” crypto trading service platform has officially become part of Sony Group.
Sony, which is dedicated to “inspiring and fulfilling curiosity using the power of creativity and technology,” encompasses “inspiring” gaming and network services, music, movies, “connecting” entertainment, technology and services, and imaging and sensing solutions, as well as “supporting” medical and financial services. In order to highlight the functions of the company’s major industries covering financial services, gaming, and entertainment, Sony Corporation was renamed “Sony Group Corporation” in April 2021 for the first time in over 60 years.
Among its various businesses, Sony’s three major entertainment businesses including gaming and network services, music, and movies have experienced rapid development for over a decade. In the 2021 financial year, their overall operating income exceeded half of Sony Group’s consolidated operating income for the first time, with overall operating profit accounting for two-thirds of the consolidated profit. Moreover, with the development and iteration of blockchain technology, especially the rise of the metaverse and NFTs closely related to entertainment products, Sony has also begun to cautiously explore and expand into the Web3 field.
As a hot term in the tech industry, the concept of the “metaverse” began to enter the field of vision of many industry companies in 2021, and entertainment giant Sony is no exception. In its 2022 fiscal year corporate strategy, Sony expects the metaverse to experience growth and plans to create new entertainment experiences in this area. Sony’s CEO Kenichiro Yoshida also revealed that the metaverse is a social space and real-time network space where games, music, movies, and animations intersect, expressing interest in launching more products with metaverse experiences for users.
With its sights set on the then-popular metaverse track, Sony quickly established a presence. In February 2022, it signed a three-year partnership with the English Premier League champions Manchester City to jointly create the world’s first metaverse football stadium. Later, in April, it was revealed that it, along with the family investment firm KIRKBI behind LEGO, had invested a total of $2 billion in Epic Games, placing a heavy bet on the metaverse. At the end of the same year, Sony acquired the AI-based data analysis and visualization company Beyond Sports, positioning it as a metaverse sports portal to provide real-time digital sports participation solutions for leagues, broadcasters, brands, and end consumers, and to provide sports content from traditional media to metaverse communication.
As for what the metaverse actually is and which technologies belong to this concept, there has never been a unified definition in the industry. In the future of the metaverse described by many, NFTs with interoperability and digital asset properties are considered essential elements, and this technology is believed to bring true digital ownership, economic activities, and social interaction to the metaverse. Additionally, NFT technology is believed to have a wide range of applications in entertainment products such as games, music, and movies in the visible future. 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, a joint venture between Sony and the software development company Sun Asterisk, with Sony Network Communications holding a 70% stake. The newly established company aims to maximize value for customers, creators, and end users by utilizing NFT technology in Web3. According to the new 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.”
Another business unit, Sony Music, began exploring the application of NFT technology at least in 2021 and participated in the $30 million Series A financing of the NFT marketplace MakersPlace that year. In 2022, it announced a partnership with the Solana-based NFT platform Snowcrash (now transformed into an AI-based music production platform) and plans to launch a series of NFTs featuring legendary musicians like Bob Dylan. Later, it established the Greater China division of RCA Records to explore opportunities in streaming, NFTs, and the metaverse, signing singers Jackson Wang and Leehom Wang. It also submitted NFT-related trademark applications for the logo of Columbia Records to be used in NFT-supported media, music and podcast production, artist management, and music distribution services.
In the gaming sector, Sony has been focusing on the development of NFT-related patents. The patents already disclosed include “Using tokens on a distributed ledger to track unique digital assets in games” and “NFT framework for transferring and using digital assets between game platforms,” the former of which describes a system and technology for tracking digital assets between different hardware platforms and publishers, while the latter explores a way to use and trade NFTs across different platforms. Sony also stated that it will build an NFT and blockchain system that can be applied to the PlayStation (PS) platform ecosystem.
Entering 2023, Sony seems to no longer be satisfied with the development of just NFT technology, further expanding its business scope in the blockchain and Web3 industry.
At the beginning of 2023, Sony Network Communications, a business unit of Sony Group, partnered with Astar Network, a multi-chain smart contract network, to launch a Web3 incubation program for projects focused on practical NFTs and decentralized autonomous organizations (DAOs) from March to June. Projects that are shortlisted may be considered for investment by Sony Network Communications. The incubation program is organized by Startale Labs, based in Singapore, the development company of Astar Network, founded by Astar CEO Sota Watanabe.
However, after the Web3 incubation program, Startale Labs, the organizer, received a clear $3.5 million investment from Sony Network Communications. In September of the same year, the two parties further deepened their cooperation by establishing a joint venture company, “Sony Network Communications Labs Pte. Ltd.,” focusing on the research and development of blockchain technology. Sota Watanabe stated that the new joint venture company will advance the development of Sony Chain, which has the potential to surpass the Layer2 network Base previously released by Coinbase.
At the beginning of this year, Startale Labs raised $3.5 million in follow-on funding in its Series A, with investors including UVM Signum Blockchain Fund, Sony Network Communications, and Samsung Next Ventures, and was valued at $63.5 million after the financing. Additionally, according to the Singapore business information platform BIZFILE, the shares of Startale Labs held by Sony Network Communications have been transferred to Sony Group, to some extent symbolizing that the blockchain has taken another step forward in Sony’s business strategy.
In 2024, Sony began expanding its financial services into the cryptocurrency industry.
In March of this year, Sony Bank, a subsidiary of Sony Financial Group, announced that it plans to launch “Sony Bank CONNECT” in the summer of 2024. This new smartphone application is designed to provide privileges to holders of digital securities and NFTs, making it easy and secure for any user to access exciting experiences. The app will connect to the market “SNFT” operated by SNFT Co., Ltd., where users can display and enjoy the NFTs they hold in SNFT.
With the release of the product, Sony plans to offer digital content to customers who have participated in past activities and received NFTs, purchased specific digital securities, or completed questionnaires. In addition, they are also developing a blockchain-based wallet and plan to continue expanding its functionality based on customer feedback after the release. Sony Bank stated, “Sony Bank CONNECT will continue to expand its functionality based on customer needs after its release, contributing to the future development of the web3 entertainment industry in Japan.”
In addition, Sony Bank began a conceptual verification in April of this year, planning to issue a stablecoin pegged to a legal currency. This experiment will be conducted on the Polygon blockchain. It is reported that due to the advantages of reduced payment and remittance fees, Sony is exploring the use of stablecoins to promote the company’s intellectual property in the gaming and sports fields. The stablecoin experiment will assess any legal issues related to yen-backed stablecoins and is expected to last 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 of Amber Japan mentioned at the beginning and its renaming to S.BLOX this month. The content to be reformed or optimized in the future includes redesigning the UI screen, releasing a new application, and expanding the supported currencies and features.
Since 2021, Sony has been continuously expanding the boundaries of its exploration into Web3, from the metaverse and NFTs to building infrastructure for public chains, and now to cryptocurrency. For a large entertainment conglomerate like Sony, cautiously integrating emerging technologies into its various business units is crucial to avoid being too aggressive and taking on too much risk, while also avoiding being left far behind due to being too conservative. This attitude of embracing emerging technologies may be the key to its ability to continue for over sixty years.
