Consumers outside Japan are becoming more important for Sony's PlayStation, network-based gaming and general entertainment businesses.
The new company, called Sony Interactive Entertainment, will be made up of Sony Computer Entertainment, the company that sells and develops PlayStation hardware, and Sony Network Entertainment International, the company that operates the PlayStation Network.
It will be based in San Mateo and will open for business on April 1, the first day of the Japanese financial year. The PlayStation division will keep its current CEO, Andrew House, and retain key business operations in London and Tokyo.
Japan was the first country where Sony put the PlayStation console on sale after its debut in December 1994. The console was a hit both at home and in overseas markets.
Its popularity overseas has grown substantially in recent years, and when the PlayStation 4 went on sale in late 2013, it became the first PlayStation console to debut in the U.S. and Europe before Japan. Total sales of the console reached 36 million units earlier this year.