Sony has officially declined to enter the bidding war for Warner Bros. Discovery, choosing instead to concentrate on its burgeoning strengths in anime and gaming. This strategic decision comes as the Japanese electronics and entertainment giant unveils its latest RGB LED TV technology, which retailers are hailing as the most significant advancement in recent years.
In a recent 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 announcement coincides with Warner Bros. Discovery’s strategic review, which could lead to a sale amid weak earnings in its legacy television business. The company has already attracted interest from multiple parties.
Sony’s Strategic Shift
Totoki has dismissed traditional Hollywood consolidation strategies, emphasizing that simply merging movie studios does not guarantee increased profitability. “Simply adding together the current movie studios doesn’t strike me as leading to a big gain in profitability,” he remarked during the Paley International Council Summit. The rise of streaming services like Netflix has shifted consumer preferences away from traditional theater experiences, prompting Sony to reposition its entertainment division.
Sony Pictures Entertainment is now focusing on becoming a hub for video game and animated content. “Unlike a big platform company for which scale is everything, SPE can choose its own way of establishing itself,” Totoki explained. 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 in North America, underscores this strategic pivot.
The Growing Anime Market
Anime represents a lucrative growth market for Sony, offering extensive tie-in possibilities with its 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.” Rather than pursuing acquisitions, Sony is fostering cooperative relationships with content creators, investing in companies like Kadokawa and Bandai Namco Holdings.
This approach is particularly relevant as Netflix makes inroads into the Japanese anime market. 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.”
Challenges and Opportunities
Sony’s decision to forgo a bid for Warner Bros. Discovery follows a series of international setbacks. A two-year effort to merge its Indian unit with Zee Entertainment Enterprises collapsed, and Sony withdrew from the race for Paramount Global, which was eventually acquired by Skydance Media.
The company’s pictures segment faces profitability challenges, with operating profit declining slightly in the year ended March 2025. In contrast, its games/network services and music segments have posted significant gains.
Sony’s pictures segment’s return on invested capital stands at 5.7%, compared to 18.5% for games/network services and 10.5% for music.
Sony aims for average operating profit growth of at least 10% annually under its current medium-term plan.
Implications for the Entertainment Industry
Sony’s decision to focus on anime and gaming rather than traditional Hollywood studios reflects broader shifts in entertainment consumption and profitability models. The absence of Sony as a bidder removes a significant player from Warner Bros. Discovery’s sale process, potentially altering the dynamics of the deal.
As Sony continues to innovate with its new RGB LED TV technology, the company remains committed to leveraging its strengths in anime and gaming to drive future growth. However, Australian pricing and availability for the new technology have yet to be announced.
This strategic focus on emerging markets and technologies positions Sony to capitalize on evolving consumer preferences, ensuring its relevance in the rapidly changing entertainment landscape.
