Sony Looking to Further Bridge Anime, Movie, Video Game Markets

Sony is seeking to further meld anime, motion picture and video game markets through SVOD subsidiary Crunchyroll; a minority stake in Epic Games, publisher of the Fortnite game franchise; the PlayStation 5 game system; and other ventures.

Speaking on the Feb. 3 third-quarter fiscal call, CFO Hiroki Totoki said consumer interest in anime throughout Japan has increased 150% over the past five years, in addition to 19% worldwide year-over-year. Crunchyroll recently topped 90 million registered users and 4 million paid subscribers across more than 200 countries.

Indeed, anime movie sequel Demon Slayer: Kimetsu no Yaiba the Movie: Mugen Train, entered 2021 as Japan’s biggest box office hit, with more than $346 million in ticket sales through Jan. 5.

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“When the markets are growing, we try to enter such market to create our growth,” Totoki said. “But according to our internal investigation, those game players, the users that enjoy games and animation, it seems that there’s high level of affinity between these two groups.”

Totoki expects to see increased cross-selling opportunities in anime and gaming going forward. Sony’s recent $250 million investment in Epic includes development of movies and music. Epic is set to release its first animated feature film, Gilgamesh, directed by Tomas Lipgot, whose Spanish-language film, The Adopters, was recently acquired by Sony Pictures Television.

“That’s a new kind of entertainment in music and motion pictures for gaming,” Totoki said. “Consumer interest in Japanese anime is increasing rapidly, particularly outside of Japan. And as a company that currently owns both content and DTC streaming service, we have positioned anime as a focus area.”

Separately, Sony said it remains on track to meet a fiscal-year sales goal of more than 7.6 million PS5 units (4.5 million cumulative units sold through December) — despite ongoing console shortages due to a lack of semiconductors. Sony is projecting 14.8 million PS5 unit sales through the next fiscal year.

Total PlayStation user game play in December was about 30% higher than the same month of the previous fiscal year, according to Sony. At the end of December, 87% of PS5 users were subscribers to PlayStation Plus, the subscription platform affording users free access to games, multiplayer gaming, PlayStation Store store, and 100GB of cloud storage, among other features.

First-party PS5 title Marvel’s Spider-Man: Miles Morales, recorded sales of 4.1 million units through December.

“We had more game software titles at the launch of the PS5 than at any previous PlayStation console launch in our history, and those titles have sold well,” Totoki said.

 

Video Game Industry Eyes Direct-to-Consumer Rewards — and Risks

Taking a cue from the subscription streaming video-on-demand ecosystem, the video game industry has quietly begun offering content to consumers online rather than solely through packaged-media retailers such as GameStop, Best Buy and Target.

Last May game publisher Electronic Arts acquired the cloud gaming technology assets and personnel of a wholly owned subsidiary of GameFly — the online packaged-media rental service that also offers movies and TV shows.

Specifically, EA aims to distribute its games to consumers online without paying license fees to third-party game platforms such as Xbox, PlayStation and Nintendo. At last year’s at annual E3 gaming confab, EA bowed a prototype subscription online gaming platforms EA Access and Origin Access.

“Cloud gaming is an exciting frontier that will help us to give even more players the ability to experience games on any device from anywhere,” Ken Moss, chief technology officer at Electronic Arts, said at the time.

Sony, whose five-year-old subscription gaming service – PlayStation Now – features hundreds of catalog games for $99 annual fee, is reportedly considering direct-to-access for new releases following its purchases of online platforms Gaikai and OnLive.

“The greatest disruption of entertainment is the combination of streaming and subscription,” Andrew Wilson, CEO of Electronic Arts, told Fortune. “More people are engaging, with less friction, through cloud-driven services.”

At the same time, offering consumers online access to hundreds of games for annual or monthly fees (the latter without contract) threatens an established retail market where game publishers often charge and get more than $50 for a single game.

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“I do believe that some subscribers might cancel after finishing the newest game they wanted to play, but the vast majority will keep their subscription because of the online multiplayer component of those same games,” said Greg Potter, an analyst with Kagan, a media research group within S&P Global Market Intelligence. “Publishers are okay with this model because hit games often have multiple revenue streams other than the purchase at the point-of-sale.”

Indeed, the gaming industry saw revenue reach record $43.8 billion in 2018, up 18% from 2017. That figure dwarfed the global box and SVOD markets.

The latter has Netflix CEO Reed Hastings worried.

In the SVOD pioneer’s recent shareholder letter, Hastings said Netflix controlled about 10% of domestic TV screen time – a tally he said is under threat more from online gaming than other SVOD competitors.

“We compete with and lose to [online gaming service] ​Fortnite ​more than HBO Now,” Hastings wrote. “When YouTube went down globally for a few minutes in October, our viewing and signups spiked for that time. Hulu is small compared to YouTube for viewing time. Our focus is not on Disney+, Amazon [Prime Video] or others, but on how we can improve our experience for our members.”

 

 

DEW Speakers: Authenticity, Accessibility Key to Marketing Content

Authenticity and accessibility were two of the top themes for speakers on the “View From the Top: The Future of Content Marketing” panel at the Digital Entertainment World conference in Marina del Rey, Calif., Feb. 5.

“We’re in a very admirable position in that our content, movies, movie trailers, people view it as a form of entertainment,” said Sandro Corsaro, SVP and chief creative officer, Fandango. “Not many people here would watch three or four car commercials for entertainment, but people love trailers.”

He noted how entertainment has a natural viral nature.

“Our influencers, if you will, if you look at Chris Pratt on Instagram yesterday or the day before, he posted about The Lego Movie 2, he posted about the Rotten Tomato score (Rotten Tomatoes is a sister company to Fandango) and that pushed to Fandango,” he said. “We don’t pay him to do that. We don’t tell him to do that. He has a vested interest obviously in the success of the content, so we’re fortunate in that sense.”

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Fandango also uses branded marketing.

“We had a program over the summer called Fanticipation with Microsoft Surface where we had a bunch of influencers get together and talk about movies using the Surface Pro to kind of diagram and design and talk about superhero movies,” he said.

Both instances involve authenticity and accessibility that make the campaigns more relevant for digital audiences.

“The expression of authenticity and the expression of accessibility through content marketing — those are the core tenets that we think of all the time when we talk about movies,” Corsaro said.

Kym Nelson, SVP of Twitch, noted that the gameplay live streaming service is one that tends to “resonate with Gen Z and the millennial audience, and [advertisers] recognize that that is their current and future consumer.”

Twitch has gathered those streamers into a force that brands can utilize.

“We’ve created a tool that automates the ability for all of our streamers to participate in a bounty if you will and we’re able to collect data on the backend and for any data we can match the information from the brand and the information from the streamers,” she said.

For instance, with Dollar Shave Club, Twitch utilized appropriate streamers to review and talk about the product. “We had them play with it and we knew it was a roll of the dice,” Nelson said.

Suffice it to say, there were unexpected streamed responses.

“They are laugh out loud funny,” offered Russell Arons, SVP and GM of Machinima.

Fandango, too, has been able to leverage comedy.

“Kevin Hart has been obviously on this meteoric rise,” noted Corsaro. “I think he’s what 135 pounds so we made him a belt that said, ‘Pound for Pound, Biggest Movie Star in the World.’ We gave him that belt in front of the Rock and we kind of watched it matriculate on the Internet.”

Authenticity, often proffered by comedy, is not the only thing marketing in the digital age requires; accessibility is also important.

“Experiential is the thing right now,” said Arons, referencing events such as Comic-con and the interaction with fans there.

“This desire to find their communities in person that they’ve been interacting with online is incredibly powerful,” she said.

Twitch’s Nelson added that “integrating [experiential] with a live stream platform so that that experiential experience can be broadcast to a wider audience so people in Mississippi, who may not be at Comic-con or South by Southwest, have that live experience [is also important].”

Tim Sovay, COO of CreatorIQ, noted the Feb. 1 event featuring DJ Marshmello and the Fortnite game platform.

“There was no brand involved in this, but it was just the power of the platform with the right artist and the right audience,” he said. “10 million confirmed viewers on a 10-minute concert took place live on the platform.”