Entering games with the PlayStation (1994)
A design philosophy that turned a rupture into a bet
The heart of this decision was to recast the misfortune of a break with Nintendo into a design philosophy of Sony’s own. The CD-ROM Sony chose was not merely a change of medium. Cheaper than a cartridge, larger in capacity and easy to copy, the optical disc lowered the burden on the outside studios that supplied software and became a vessel that drew in a wide range of titles. To gather people by the richness of software rather than compete on the power of the hardware — for a Sony that had watched Betamax lose to VHS on the number of titles, this was the reverse of its own lesson.
Still, the obsession of Ken Kutaragi, the man at the centre of the rupture, would not by itself have started the business. What overrode the internal caution that saw games as an extension of toys, and allowed a solo entry, was president Norio Ohga, who already held film and music inside the company. Good software cannot be mass-produced like a factory’s output — Ohga’s words mark the distance from the consumer-electronics habit of earning by mass-producing hardware. Which to place at the centre of earnings, hardware or software: to that theme Sony had pursued since the CBS and Columbia deals, the PlayStation gave a new answer in games, and it remains today the group’s largest business.
Revenue and net margin, FY1989–FY1999
Revenue in ¥ bn (bars) and net margin in % (line), for the years around the decision. Shaded columns are FY1994 onwards — after it was taken.
Source: securities reports
Read the full dossier in Japanese →
The Japanese edition carries the complete record of this decision — the situation that forced it, the options weighed, what actually followed, and the sources behind every claim.
Other key decisions at Sony Group
- 1955 Licensing the transistor, exporting under the SONY brand (1955)
- 1989 Buying CBS Records and Columbia Pictures: hardware meets software (1988–89)
- 2014 Hirai’s select-and-concentrate: divesting VAIO and the battery business (2014)
- 2019 Refusing Third Point’s break-up demand; holding the group together (2019)
- 2021 Yoshida’s purpose management and the pure holding company (2021)
- 2025 Partially spinning off and re-listing the financial arm (2025)
Yen amounts are converted at the average rate of each figure’s own year — not today’s rate; the revenue chart is shown in yen. Exchange rates & sources — the full ¥/US$ table →
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- Sources are primarily each company’s securities reports and other public filings, but errors and omissions may remain.
- Any use of this information is at the reader’s own risk. Past performance does not indicate future results.
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Data API
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| Method | Endpoint | Returns |
|---|---|---|
| GET | /api/companies.json | All companies |
| GET | /api/6758/manifest.json | Resource index |
| GET | /api/6758/history.json | History overview |
| GET | /api/6758/timeline.json | Chronology |
| GET | /api/decisions.json | All management decisions (index) |
| GET | /api/6758/decisions.json | Management decisions (index) |
| GET | /api/6758/decisions/{slug}.json | One decision (full dossier) |
| GET | /api/6758/executives.json | Executives |
| GET | /api/6758/shareholders.json | Major shareholders |
| GET | /api/6758/financials.json | Financial statements |
| GET | /api/6758/financials-longterm.json | Long-term results |
| GET | /api/6758/segments.json | Business segments |
| GET | /api/6758/regions.json | Sales by region |
| GET | /api/6758/workforce.json | Workforce |