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Sony doubles down on virtual production business using its hardware muscle

Sony's virtual production facility is pictured in Tokyo, Japan September 20, 2023. REUTERS/Sam Nussey

A corporate executive said Sony Group (6758.T) focuses more on virtual production, which is outgrowing the market, thanks to its technology.

The company provides virtual production tools to filmmakers and broadcasters utilizing a wall of light-emitting diode (LED) screens to merge imagery like a science-fiction environment or an urban skyline into the scene. The technique offers more realistic light reflections and higher actor involvement than green screens, which add digital effects later.

Sony benefits from its technical knowledge—it creates everything from camera image sensors to supersized LED video walls—and Hollywood moviemaking ability.

“It’s because we have hardware that we can recreate in the virtual world,” Sony’s virtual production chief Yasuharu Nomura said in an interview. Sony has abandoned failing electronics businesses to focus on gaming, movies, and music but still produces movie cameras. The firm invests in Epic Games’ Unreal Engine, which creates digital worlds.

Sony claims its virtual production business is expanding by 35% yearly, faster than the market, with more services sales forecast. The firm is improving panels, cameras, and services and enabling “volumetric capture,” where acts are shot from many perspectives for virtual reality.

Virtual production technique received prominence after Walt Disney (DIS.N) employed it in “The Mandalorian” with in-house visual effects business Industrial Light & Magic.

“The business is still in its infancy therefore there is room for Sony to develop,” said Citigroup analyst Kota Ezawa.

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