Sony Corp. said Tuesday that it will move the headquarters of its PlayStation videogame unit to California, a move that reflects the industry's view of the U.S. as offering the best growth potential.
The change will take effect in April, and the new company will be called Sony Interactive Entertainment LLC.
As free smartphone games have proliferated, the Japanese market for videogame consoles such as the PlayStation has shrunk, while the U.S. market has continued to expand.
Sony said relocating to the U.S. would enable it to respond more quickly to industry trends.
"It makes sense for us to put headquarters functions in the U.S. because we have a lot of important business partners in the U.S. and a lot of changes in the industry we need to deal with promptly tend to appear there first," a spokeswoman for Sony Computer Entertainment said.
Andrew House, chief executive of the PlayStation unit, will retain the same position at the new company. Other executives working from Tokyo will also have offices in California, enabling them to spend more time meeting local business partners, Sony said.
No job cuts or large personnel shuffles were planned in Japan, Sony said.
Sony said that it also hoped moving the PlayStation headquarters to the U.S. would enhance its relationship with customers there.
Sony Computer Entertainment was established in Japan as a joint venture of Sony Corp. and Sony Music Entertainment Inc. in 1993, when Japan was at the forefront of the videogame industry. Sony released the first PlayStation console in Japan the following year, before expanding distribution to other countries.
The size of the console-based videogame market in Japan has halved in seven years, according to a Japanese industry body, the Computer Entertainment Supplier's Association. Sony and fellow Japanese videogame giant Nintendo Co. have struggled on their home turf. Japan was the first location where Sony cut the price of its PlayStation 4 console last year.
Meanwhile, the U.S. console market has topped $10.4 billion, making it the world's largest. Sony has sold more than 30 million PlayStation 4 units since the launch in November 2013. Analysts say Sony is leading its rivals in the console market, including Nintendo and Microsoft Corp.
Industry veteran Hirokazu Hamamura, a director at Kadokawa Dwango Corp., said earlier that the U.S. market is crucial for Sony to stay ahead of the competition because, in addition to its size, the latest trends usually originate there.
The U.S. has served as a testing ground for new PlayStation services, including a videogame subscription service called PlayStation Now.