Hi everyone and welcome to our podcast in Good Company. I'm Nikola Tangyan, the CEO of the Norwegian Sub-1 World Fund. In this podcast I talk to the leaders of some of the largest companies we are invested in, so that you can learn what we own and meet these impressive leaders. Today I'm speaking to Kenny Chira Yoshida, CEO of Sony.
Sony is behind the iconic Walkman, the revolutionized how we listen to music, to PlayStation, Blu-ray and Alpha series cameras that capture the world in stunning detail. Sony is also in movies, different electronics, semiconductor, financial services and much more. We own almost 2% of Sony, translating into 17 billion crore or 1.7 billion US dollars. We have been invested in Sony for more than 20 years, proper long term thinking. Ken is an impressive leader and Sony is a fascinating company.
You don't want to miss this one. Well it's a huge pleasure and honor to be here with the CEO of Sony. I mean we all know Sony, it's all over, all around us and has been for a long time. So big thanks Ken for taking the time this morning. Thanks for having me. Now you have a tremendous history in coming up with new world changing products. You want to just give us a brief recap of some of the ways you have changed consumer electronics.
Looking back on our long history of 77 years, I believe Sony is a company that has expanded its business based on its origin in sound. The Sony name and brand comes from Phones, which is Latin meaning sound. This 1946 we have developed businesses in electronics, entertainment and semi-productors. Our electronics products initially focused on sound such as tablecloths and transistor radios. Sony's entertainment business also be with music. We launched a joint venture CBS Sony Records in 1968.
And move into pictures came in 1989 with the acquisition of Columbia Pictures. And then in the mid-1990s we started our gaming business, prestige. We also engaged in transistors in which were used in transistor radios through our same-computer business. Sony has the largest share of CMOS-IMMS sensors. So I'll stop here for now. Yeah, I know he's for sure a very impressive history.
And one of your biggest fans ever was actually Steve Jobs, and his famous turtle, like even is inspired by the uniform you had at Sony. So what do you think it was that he admired so much with Sony? Steve Jobs has left great influence on technology and entertainment. So we feel honored to have such praise. Now you have been part of this great comeback for Sony first as a CFO and now as the CEO. So tell us about the shift that you made after you took over.
Well, one point is a thick entertainment. Entertainment content used to be our method for packaged products such as CD and Rural Aid Brares. And at one point, the method itself became our purpose. People are emotionally moved by the content. It plays an important role in filling people's desire. So this will remain unchanged, so entertainment is now our purpose. That is one point. The other point is focus on creativity. So entertainment has become a purpose.
Most important decision was to shift our focus to creativity. Another was pursuit of candle. Cuddle is a Japanese word for emotion. First, we exit it from PC business. Then for TVs and smartphones, we focused on premium buy. Second, we divested battery and display panel businesses. We focused on the most image sales. Third, we invested in entertainment. We strengthened our ability to create IPs, but also invested in direct-to-consumer services in specific areas.
How are you making Sony more creative? What is the key to spurring creativity? Well, creativity is what we have been focusing on lately. Since I became CEO in 2018, we have been investing in content. That is games, music and pictures. This investment has been led by our position of EMI Music Publishing Business, which was a 4 billion dollar deal.
And in addition to producing hardware like TVs and smartphones, we are also focused on making products that support creators like photographers and cinematographers. The same applies to our semiconductors. In the past, we produced batteries and display panels. But now we are concentrating on CMOS image sensors. The primary use for these image sensors is smartphone cameras. It plays a role to turn users into creators.
Taking more of a helicopter view, when you think about Sony's corporate culture, what are the things that come to mind for you? Well, thank you for the question. First and foremost, I believe that corporate culture has a significant impact on the success of a company. It influences execution, which is more important than strategy. Culture is what ensures the ability to execute. But a special value is the culture of not feeling failure and learning from failure.
And one example, actually, back in 2015, we launched a DTC service that covered Geraint Entertainment, such as Live TV, movies and sports. However, we were not able to obtain many subscribers. And we launched a covering broad entertainment to require the high level of capital. So after less than five years, we had to announce the closure of the service. This was a business failure. However, through this initiative, we learned a great deal about DTC services.
It has led us to the idea of focusing on communities, specific areas of entertainment. So examples are precision network and crunch role and animated DTC service. You say that you need a culture where you should not feel failure. Is that a particular challenge in Japan where you are not supposed to lose face? You want to preserve your face? And is it more difficult to get that kind of culture embedded in the firm? Well, yeah, that's the challenging part.
I think nowadays, even in Japan, there are many startups. So I think the culture of challenge is now being naturally in the Japanese culture or Japanese society, I think. Continuing on corporate culture, the first thing you told me when we met was, thank you, Mr. Tangon, because you have been now, you know, the someone wealth fund has been a shareholder in Sony for 25 years.
I thought it was an amazing thing. And long term thinking in my mind is completely underrated and Sam Altman, who we had on recently, said there was a competitive advantage because nearly nobody, nobody thinks long term anymore. So tell us about the way you think long term in Sony. Companies must face many stakeholders such as customers, employees, shareholders and society. And I also believe that for all of us, the most important stakeholder is planet Earth.
The time horizon differ depending on the stakeholder. However, I believe it's important for companies to have long term thinking to build a sustainable future for the next generation. Historically, people in Japan had often won job for life. And you know, when we read the books about Sony, it's the whole thinking about employees as part of the family is really interesting. How do you view this? Long term improvement is maybe that is Japanese culture.
And there are many to having employees who knows the company well. However, I believe that having diverse backgrounds and experiences is important for your career. Sony has many businesses and we provide opportunities to our employees to work at different groups. We also have a program called Sony University designed to foster global leaders. Through this program, employees from diverse backgrounds can interact with each other and build relationships that go beyond business boundaries.
Very interesting. Now, last question on the corporate culture, we recently did an interview with a leading expert on perfectionism. Now, how do you view perfectionism? Well, rather than demanding perfection, I think it is more valuable to experience failure. This is because people can learn and grow from mistakes. What is the biggest mistake you have made? That's it. I led the project of General DTC Service. It was a completely failure that is called PlayStation View.
It was the General Entertainment DTC Service. And how did you cope with it? Well, we closed the service and we learned from the failure whether or not. I'd love to spend a bit more time on your various business lines because you are a leader in so many different things. And perhaps if we kick off with gaming and PlayStation, which is truly an iconic product for you, how do you see the future of gaming?
It should be ubiquitous. Wherever there is computing, users will be able to play their favorite games, seamlessly. Why PlayStation View? Remain our core product. We will expand our gaming experiences to PC, mobile and cloud. Are you a gamer? The reality is, I don't have much time to play games on a daily basis now. But I am personally looking forward to playing Marvel's Spider-Man 2. It seems like the trend in gaming is more towards subscription models.
How are you looking at these models compared to what you are doing? Well, we do subscription business model signs. At the same time, people usually play one game at a time. So all you can eat type of many games and not may not be so valuable compared with video streaming services. So you have kind of balanced or hybrid service on PlayStation Network, subscription as well as paper content. Do you think the link up with between Microsoft and Activision will change the landscape a lot for you?
PC Compatition is necessary for the game industry to grow. And at Sony, it is important to provide gamers with different options to print. So we will continue our efforts to achieve this. Moving on to music. You have a lot of labels, vast catalogues and so on. How do you see Sony's role in the music industry going forward? Our goal is to foster and support artists and songwriters around the globe. Our top artists include Beyoncé, Paris Style and Sheezer.
It's interesting when you read the books about Sony, many of the CEOs have had close relationships and close friendships with some of the leading musicians of the times. Well, both classical and more pop related, I guess. Do you have a musician, friends? Well, I recently met not a real friend, but I met Adele and the Paris Style. Are you a big fan of Adele's? Yes, very much. Now, you have also had a successful movie business. What is your strategy in movies?
Our strategy in movies in the pictures business is becoming a strategic supplier. We do not own the General Entertainment DTC service. So as an independent studio, we work with our partners and identify the best place to distribute creators content. However, we directly deliver content to users in specific categories such as anime. We share the data gained through our service, so that creators can utilize it to enhance content creation. So again, we are focusing on the creation cycle.
We are seeing now that some companies are spending more resources on developing. Well, we don't know what it is going to be yet, but hardware in order to make us experience AI in a different way. Be it telephone headsets, these kind of things. How do you think AI will change the way we consume entertainment? The convergence of computing and entertainment is a megatron. And AI is also bold out of computing. So we cannot get in the way of technology.
But at the same time, entertainment is a people business. For example, it is technically possible to create a movie scene in which Tom Hanz speaks Japanese with a perfect lip scene. But should we? That is a question. The content that forms the basis of entertainment is creator-genit and copyrighted. Creator's involvement is essential. Therefore, Sony positions AI as a technology that supports real goals. AI should not replace them. For example, it is a game. Games are computer software.
It is made by programming language. LLM, large-language model, will help dream-like game developers, allowing creators to focus more on creativity. Moving on to you, Ken, as a person. Are there any moments in your upbringing which formed you as a leader you are today? There are many moments throughout my experience at Sony. But if I were to choose one, it would be my experience as a president at Sony.
After becoming president and going public, I changed the company name from Sony communication network to Sony entertainment. I believe that the 21st century would be the era of entertainment. And in that, the internet would create a central role. So I managed the company with a vision to make it a strong presence in this field. Little again today. I also removed the Sony brand aiming to become independent from Sony.
From the experience I gained at Sony definitely helped me to become the leader I am today. How do you look at the trade-off between delivering steady profits and investing in innovation and creativity which potentially could land you a blockbuster further out? I think communication is the most important. Communication with our people at the same time communication with our stakeholders, including shareholders. So our vision is quite long time. Our purpose is quite long time.
So I think as a senior, direction and decision and people are in most important things. Now by many people considered one of the most curious CEOs. How can we see your curiosity in your everyday life? Yes, because I think I still have a lot to learn from others. Dreams and curiosity is actually the first value that I define along with our purpose, which I drive our employees to change. How do you spend your time outside work? I have a 20-year-old son. He is on the autism spectrum.
He spends weekdays at a group home and comes home on weekends. So during the weekend we go out by car or train and have lunch together. It's usually Japanese noodles or Japanese omelet rice. Actually for me spending time with him is relaxing. Those on the autism spectrum are very diverse. In my sense case, he can remember the full names of people he needs and never forget them. But he cannot communicate in the same way that you or I can. Why my son has a different way of communicating?
He has an incredibly pure perspective. So my wife and I often talk about how much we are influenced by his innocence. He also makes me realize that people operate differently. Can this appreciation for people who are different? What do you think it has done with you as a person and as a leader? Well, as a leader. But there are many people in the group. We have 110,000 people and we have diverse businesses and diverse people. And Sony's diversity is a spirit. This is a strength.
And I strongly believe one of my mission is to leverage this diversity. Last thing, we have got tens of thousands of young people listening to this podcast. What is your best advice to young people? I see you. I have a lot of time to give advice because I am actually the one that learns a lot from younger generations. But if I were to provide one piece of advice, it would be always challenging yourself. And let's Sony to try working at an Internet service provider.
And I tried many things such as online games, Internet services and animation. Many of them were not successful. But they have led me to where I am today and have become a success for me. Even if you fail, you can learn from your failures. So I encourage you to continue to take on new challenges. I am still on the learning journey. It's been an honor to have you on here. I am very much forward to my next visit to Tokyo.
I hope we can share a bowl of noodles together and continue this very interesting conversation. Thank you.