Sony to set up two Chinese JVs with Shanghai Oriental Pearl Group

Sony plans to set up two joint ventures to make and market PlayStation consoles and games in China, according to the company's Chinese partner.

One joint venture would be responsible for the PlayStation's hardware, while the other would be focused on software, Sony's partner in China, the Shanghai Oriental Pearl Group, said on Monday, in a filing to the Shanghai Stock Exchange.

Shanghai Oriental Pearl, operates across tourism, property, media and investment domains.

In a separate communication, Sony's chief executive, Kazuo Hirai, said in Tokyo that the company hoped to increase sales of PlayStation 4 console, to turn it into a main driver of the fast-growing network of the company as also streaming services business, which in turn would spur interest across Sony's product categories.

According to Hirai, the company's game business was the one area in which Sony would try to sell more products even as it emphasised profitability over sales volume across the rest of its electronics division.

The company's move follows announcement by Microsoft Corp that it planned to sell its Xbox One machine in China, and Nintendo Co saying it planned to expand in emerging markets with new devices.

China's video-game industry is expected to generate $10 billion in sales next year, according to PricewaterhouseCoopers LLP, and console makers were trying to wean away players from games on their smartphones and tablet computers.

''PlayStation needs to expand its user base,'' Hirai told reporters in Tokyo on Monday after the announcement of the ventures. He added that the PlayStation platform was the main driver for the expansion of the company's network business, which included music and video downloads.

Sony was up 3.1 per cent at 1,683 yen in Tokyo trading. The shares were down 7.8 per cent this year, against the  8.3 per cent drop on the benchmark Topix index.

In September, Shanghai inaugurated a free-trade zone with more relaxed financial and investment controls as China opened up to market forces, in a move that is expected to attract players across the spectrum from console makers to banks.