What Web3 Strategy Lies Behind Sony's Acquisition of a Crypto Exchange?
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What Web3 Strategy Lies Behind Sony's Acquisition of a Crypto Exchange?
As blockchain technology continues to evolve, particularly with the rise of the metaverse and NFTs—areas closely tied to entertainment products—Sony has begun cautiously exploring and expanding into the Web3 space.
Navigating Web3 tides with focused insightsAuthor: Zen, PANews
On July 1, Amber Japan officially rebranded to S.BLOX. After being acquired in February 2022 by a subsidiary of Singapore-based market maker Amber Group, and subsequently fully acquired in August 2023 by Quetta Web, a wholly-owned subsidiary of Sony Group, the company operating the cryptocurrency trading service platform "WhaleFin" has now formally become part of the Sony Group.
With its mission to "touch the hearts of people around the world through creativity and technology," Sony's business segments include entertainment businesses that "move people"—gaming and network services, music, and film; businesses that "connect people"—entertainment, technology and services, and imaging and sensing solutions; and those that "support people"—healthcare and financial services. To highlight these core functions across financial services, gaming, and entertainment, in April 2021, Sony Corporation changed its name to "Sony Group Corporation," marking the first name change in over 60 years.
Among its various divisions, Sony’s three major entertainment businesses—gaming and network services, music, and film—have seen rapid growth over the past decade. In fiscal year 2021, their combined revenue surpassed half of Sony Group’s total consolidated revenue, while their operating profit accounted for two-thirds of the group’s total consolidated profit. As blockchain technology continues to evolve, particularly with the rise of metaverse and NFTs closely tied to entertainment products, Sony has begun cautiously exploring and expanding into the Web3 space.
Metaverse
As a buzzword in the tech industry, the concept of the "metaverse" entered the strategic vision of many companies starting in 2021. Entertainment giant Sony was no exception. In its fiscal year 2022 corporate strategy, Sony projected growth in the metaverse and planned to create new forms of entertainment experiences within this domain. CEO Kenichiro Yoshida noted that the metaverse represents a social and real-time digital space where gaming, music, film, and anime converge, expressing interest in launching more products offering metaverse experiences to users.
After identifying the booming metaverse sector, Sony quickly moved to establish its presence. In February 2022, it signed a three-year partnership agreement with Premier League champions Manchester City to co-develop the world’s first metaverse football stadium. Then in April, it was revealed that Sony and KIRKBI—the family investment firm behind LEGO—each invested $1 billion, totaling $2 billion, into Epic Games, making a significant bet on the metaverse. By the end of that year, Sony acquired Beyond Sports, an AI-powered data analytics and visualization company positioned as a metaverse sports gateway, providing real-time digital sports engagement solutions for leagues, broadcasters, brands, and consumers, delivering sports content across traditional media and the metaverse.
NFT
There remains no industry consensus on what exactly constitutes the metaverse or which technologies fall under its umbrella. However, in many envisioned futures of the metaverse, interoperable, digitally-asset-backed NFTs are considered essential components, enabling true digital ownership, economic activity, and social interaction. Moreover, NFT technology holds broad application potential in entertainment products such as games, music, and films. Since 2022, Sony has shown sustained interest in the NFT space.
In April 2022, Sony Network Communications, a subsidiary of Sony, established an NFT-focused venture in Singapore, jointly with software development company Sun Asterisk, holding a 70% stake. The new company aims to maximize value for customers, creators, and end-users by leveraging NFT technology in Web3. According to its website, its services include “NFT business strategy planning support,” “NFT issuance support,” “unique token issuance support,” “NFT game development support,” and “NFT promotion support.”
Another Sony division, Sony Music, had already begun exploring NFT applications as early as 2021, participating in MakersPlace’s $30 million Series A funding round that year. In 2022, it partnered with Solana-based NFT platform Snowcrash (which later pivoted to an AI-powered music creation platform), announcing plans to release NFT collections featuring legendary musicians like Bob Dylan. It also launched RCA Records’ Greater China division to explore opportunities in streaming, NFTs, and the metaverse, signing artists such as Jackson Wang and A-Lin. Additionally, it filed trademark applications related to NFTs for Columbia Records’ logo, intending to use the mark for NFT-backed media, music and podcast production, artist management, and music distribution services.
In gaming, Sony has focused on developing NFT-related patents. Publicly disclosed patents include “Tracking Unique Digital Assets in Games Using Tokens on a Distributed Ledger” and “NFT Framework for Transferring and Using Digital Assets Across Gaming Platforms.” The former describes systems and methods for tracking digital assets across different hardware platforms and publishers, while the latter explores cross-platform usage and trading of NFTs. Sony has also stated its intention to build an NFT and blockchain system applicable to the PlayStation (PS) ecosystem.
Infrastructure
By 2023, Sony appeared no longer content with merely developing NFT technology and began expanding its footprint across the broader blockchain and Web3 industries.
At the beginning of 2023, Sony Network Communications collaborated with Astar Network, a multi-chain smart contract platform, to launch a Web3 incubation program focused on projects utilizing NFTs and decentralized autonomous organizations (DAOs). Running from March to June, selected projects could be considered for investment by Sony Network Communications. This incubation program was organized by Startale Labs, headquartered in Singapore and the developer of Astar Network, founded by Astar CEO Sota Watanabe. (Related reading: Interview with Astar Founder: Sounding the Japanese Web3 Alarm, 'Sony Chain' Poised for Major Upgrade)
However, after the conclusion of the Web3 incubation program, it was Startale Labs itself that clearly secured a $3.5 million investment from Sony Network Communications. In September of the same year, the two parties deepened their collaboration further by establishing a joint subsidiary, “Sony Network Communications Labs Pte. Ltd.,” focused on blockchain technology R&D. Sota Watanabe commented that the new joint subsidiary would advance the development of “Sony Chain,” a blockchain with the potential to surpass Coinbase’s previously launched Layer 2 network Base.
Earlier this year, Startale Labs raised another $3.5 million in a follow-on Series A round, with investors including UVM Signum Blockchain Fund, Sony Network Communications, and Samsung Next Ventures, reaching a post-funding valuation of $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 elevated strategic importance within Sony’s overall business framework.
Finance
In 2024, Sony began extending its financial services into the cryptocurrency industry.
In March this year, Sony Bank Co., Ltd., a subsidiary of Sony Financial Group, announced plans to launch “Sony Bank CONNECT” in summer 2024. This new smartphone application is designed to offer privileges to holders of digital securities and NFTs, enabling all users to easily and securely access exciting experiences. The app will connect to the marketplace “SNFT” operated by SNFT Corporation, allowing users to display and enjoy their NFTs held on SNFT.
Alongside the product launch, Sony plans to distribute digital content to customers who participated in past events and received NFTs, purchased specific digital securities, or completed surveys. Additionally, they are developing a blockchain-based wallet and plan to expand functionalities based on user feedback after launch. Sony Bank stated, “Sony Bank CONNECT will continuously evolve based on customer needs after launch, contributing to the future development of Japan’s Web3 entertainment landscape.”
Moreover, in April this year, Sony Bank began conducting a proof-of-concept trial for issuing fiat-pegged stablecoins. This trial will take place on the Polygon blockchain. Due to the advantages of reduced payment and remittance fees, Sony is exploring the use of stablecoins to promote its intellectual property in gaming and sports. The stablecoin trial will assess any legal issues associated with transferring yen-backed stablecoins and is expected to last several months. Development will be outsourced to SettleMint, a blockchain company headquartered in Belgium.
The latest development in cryptocurrency and financial services is the aforementioned acquisition of Amber Japan by Sony, which has since been renamed S.BLOX this month. Its future roadmap includes revamping or optimizing elements such as UI screen redesign, releasing new applications, and expanding supported currencies and features.
Since 2021, Sony has steadily expanded its exploration of Web3—from metaverse and NFTs to building public blockchain infrastructure and entering the cryptocurrency space. For a large entertainment conglomerate like Sony, carefully integrating emerging technologies into its diverse business units allows it to avoid both excessive risk from over-aggressiveness and falling behind due to conservatism. This balanced and inclusive approach toward new technologies may well be the key to its six-decade-long success.
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