Sony in talks with AT&T to buy animation-streaming service startup Crunchyroll for more about $1 billion

Sony Corp is in final talks with AT&T to acquire San Francisco-based animation-streaming service Crunchyroll in a deal worth more than $957 million (100 billion yen), according to a Friday report from Reuters, citing Nikkei business daily. Crunchyroll is a San Francisco-based tech startup that provides animation-streaming service for Japanese animated productions and Asian media services. A Sony spokesman declined to comment on the report.

The acquisition is part of Sony’s effort to beefing up its gaming and entertainment businesses under Chief Executive Kenichiro Yoshida’s strategy to increase recurring revenue streams that cushion the impact of volatile hardware sales cycles.

Founded in 2008 by Brandon Ooi, James Lin, and Kun Gao, Crunchyroll has over 20,000 videos and 10,000 hours of Anime, Korean Drama, and Live-Action titles on Crunchyroll.com and Crunchyroll-powered platforms including iPhone, iPad, Android, TV set-top boxes, Playstation®3, Xbox LIVE, and other devices. Crunchyroll is funded by leading venture capital firm, Venrock, Japanese entertainment giant TV TOKYO, digital publishing leader Bitway and a group of angel investors representing some of the brightest and most successful entrepreneurs in Silicon Valley.

The acquisition would give Sony access to Crunchyroll’s 70 million members around the world, allowing the Japanese entertainment and electronics conglomerate to compete better with Netflix and other global rivals, the Nikkei said.

Sony hopes to leverage the new channel to distribute its own entertainment content, including films and music. The Japanese giant recently obtained exclusive rights to negotiate for Crunchyroll.