Sony has been selling its new Playstation2 console at a loss in the hopes of cashing in later on game software licenses. Games have the highest profit margins of all its businesses. With both hardware and entertainment content in its inventory, broadband is the key link for Sony to connect the two. Sony already operates its own ISP, So-net. The company has recently taken stakes in Tokyu Cable and Fuji Television to take advantage of the advent of cable broadband and digital TV broadcasting.
Digitization is a double-edged sword, as it allows for easier piracy.
Sony's broadband network entertainment strategy is a long-term one. Broadband infrastructure in Japan has been slow to happen, and it is unclear how long it will take for this infrastructure to be widespread enough that music and game distribution add to profits. Perhaps for this reason, it has also hedged itself on wireless narrowband and partnered with NTT DoCoMo to supply content to i-mode users. All Rights Reserved.