Sony acquires broadband company to strengthen its cloud-gaming ambitions

playstation network

More than a month after Sony announced it would acquire cloud-based streaming video game service Gaikai, the company plans to make another major purchase that will develop its cloud gaming business. Sony and Japanese broadband company So-Net signed a filing that will make the latter a fully owned subsidiary.

According to ZDNet, Sony intends to purchase the 42 percent stake in So Net it doesn’t already own for approximately $764 million. Sony already owns a majority stake in the company but the acquisition will, in the company’s words, allow it “a full leverage of So-net’s business portfolio and assets.”

That full leverage focuses in particular on So-Net’s usage for Sony’s cloud-based entertainment businesses. It plans to use So-Net to “advance the pursuit of cloud services and interactive entertainment experiences in Japan and Asia” as well as “an expansion of Sony’s network service platform to Asia outside Japan as well as within Japan.”

So-Net’s a good grab for Sony. The company currently has more than 2 million broadband subscribers and its sales totaled approximately $1.2 billion last fiscal year. Sony needs that kind of healthy influx of cash, especially considering its brutal losses.

The So-Net purchase does more than just increase Sony’s control of an already reliable earner—It’s another pillar in the company’s impressive attempt to future proof its entertainment business. Gaikai gives Sony an established infrastructure to relaunch its PlayStation business around streaming as well as physical disc and digital download sales.

Gaikai and So-Net also compliment Sony’s mobile business. In October of last year, Sony bought out Ericsson’s share of the two company’s joint venture Sony Ericsson. The brand has lost significant market share to other Android handset makers like HTC and Samsung, not to mention the still booming Apple.

Sony has tried to hold an iron grip around entire industries before. When CD sales crumbled in the face of digital distribution, Sony invested heavily in the Blu-ray disc format, trying to get a foothold and failing miserably in the process. Blu-ray was shortsighted though. The future of entertainment is in cloud-based streaming services, and Sony has shown impressive foresight in its acquisitions. So-Net will allow it to reach millions of customers directly, hoping to offer them streaming PlayStation service, in addition to music and movies through the Sony Entertainment Network.

The question now is whether it will look to partner with a broadband provider in the US or purchase one outright.

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