Sony has officially announced that it will not pursue a bid for Warner Bros. Discovery, choosing instead to focus on its strengths in anime and gaming. This decision comes as the Japanese electronics and entertainment giant unveils its latest RGB LED TV technology, which retailers are hailing as a significant advancement in the market.
In an interview with Nikkei, Sony Group CEO Hiroki Totoki stated, “Right now, we don’t want to do a big Hollywood M&A deal. We want to build a solid base in our strengths of anime and games.” This statement underscores Sony’s strategic pivot away from traditional Hollywood consolidation strategies.
Sony’s Strategic Shift
Warner Bros. Discovery, known for owning CNN and producing the Harry Potter films, recently announced a strategic review to explore potential sale opportunities. The company has been grappling with weak earnings in its legacy television business and has attracted interest from multiple parties. However, Sony’s decision to abstain from bidding reflects its broader strategic shift.
At the Paley International Council Summit, Totoki dismissed the relevance of simply merging movie studios, stating, “Simply adding together the current movie studios doesn’t strike me as leading to a big gain in profitability.” This sentiment highlights Sony’s focus on emerging markets and new media consumption trends.
Focus on Anime and Gaming
Sony Pictures Entertainment is increasingly positioning itself as a hub for video game and animated content. Totoki emphasized, “Unlike a big platform company for which scale is everything, SPE can choose its own way of establishing itself.” This approach is exemplified by the success of Sony subsidiary Aniplex’s animated film “Demon Slayer: Kimetsu no Yaiba Infinity Castle,” which became the highest-grossing international movie of 2025 at the North American box office.
Anime presents extensive tie-in possibilities with Sony’s gaming and music businesses. Totoki noted, “The global market for anime is just dawning right now and will continue to grow by double digits for a while. We are focused on growth markets.”
Building Cooperative Relationships
Rather than pursuing acquisitions, Sony is cultivating cooperative relationships with content creators. Totoki explained, “Many of the publishers that own the original works are unlisted, and they are not easy investment targets. It’s important to have cooperative relationships that foster original works.”
Sony is forming a loose alliance through investments in content-rich players, including Kadokawa and Bandai Namco Holdings, particularly as Netflix makes inroads into the Japanese anime market. This strategy aligns with Sony’s broader focus on sustainable growth and innovation.
Challenges and Opportunities
Sony has faced international deal setbacks, such as the collapse of a two-year effort to merge its Indian unit with Zee Entertainment Enterprises and its withdrawal from contention for Paramount Global, which was eventually acquired by Skydance Media. Despite these challenges, Sony remains committed to its strategic vision.
The pictures segment of Sony’s business has encountered profit challenges, with operating profit declining slightly in the year ended March 2025. However, the games/network services and music segments have posted significant gains, with the pictures segment’s return on invested capital at 5.7%, compared to 18.5% for games/network services and 10.5% for music.
Sony targets average operating profit growth of at least 10% annually under its current medium-term plan.
Implications for Warner Bros. Discovery
Sony’s decision to abstain from bidding removes a potential major contender from Warner Bros. Discovery’s sale process. This move reflects broader shifts in entertainment consumption and profitability models, as Sony focuses on anime and gaming rather than traditional Hollywood studios.
As for Sony’s new RGB LED TV technology, Australian pricing and availability have yet to be announced. The technology is expected to further solidify Sony’s position in the consumer electronics market, complementing its strategic focus on content innovation.
