Sony has made big moves for their PlayStation business in China.
Sony China has moved to take full ownership of PlayStation’s distributor in China, Oriental Pearl. This was the press release shared on investgame.net:
China-based subsidiary of Sony Interactive Entertainment (TYO: 6758), Sony China, has acquired the remaining 51% controlling stake in its joint venture with China-based entertainment company Oriental Pearl. The two companies originally partnered in May’14 to support PlayStation hardware distribution in China. Following the transaction, the entity will be renamed Wanzhanpiwu Cultural Entertainment Development, granting Sony full ownership of PlayStation hardware distribution operations in the Chinese market.
As ResetEra user DriftingSpirit posted, Sony China originally established a joint venture with Oriental Pearl in 2014. That business deal was for both distribution of the PlayStation in China, and for Oriental Pearl to make new games. We did go and check what games Oriental Pearl made on MobyGames, and there’s an odd end to video game development in 2018. It seems that the studio was independent enough to make both PlayStation 4 exclusives and multiplatform games in that time. So it’s not clear if there’s still a video game studio in Oriental Pearl which presumably would become a PlayStation Studio today.
In any case, the formation of Wanzhanpiwu Cultural Entertainment Development will be big for the PlayStation business in China. It means Sony has made a commitment to invest in expanding their console business in the region, even if Sony Interactive Entertainment is headquartered in California. To be clear, this does not seem to be related to PlayStation manufacturing. We also don’t know 100 % how much PlayStation manufacturing remains in China, and how much could still be in Japan, or could have moved to other countries like Vietnam and Thailand.
So what’s the importance of this distribution business? China’s rules for video game companies to do business place a lot of emphasis on having local business partners. Sony owning the distribution company instead of having to negotiate partnerships and business relationships makes things everything so much easier for them. This will benefit not only the PlayStation 5, but also future products like the PlayStation 6 and the rumored upcoming PlayStation portable console.
One could even speculate that Sony might look for opportunities to sell some of their other struggling products, specifically PlayStation VR 2, out in China now. The VR business is slowing down in China at the moment, just as it is in the rest of the world. Nonetheless, Sony may be better able to sell their VR headsets now that they have direct control of their Chinese distribution network.
All of this really is about what benefits Sony and Chinese gamers, than the rest of the world. But we’ll see if these moves prove to benefit PlayStation in the long run.
