Sony Spinning Off Audio and Video Business, Focus on PlayStation and Image Sensors

In February 2014, Sony announced the spin-off of the companies Vaio computer PC business and the Television business in an affect to make Sony a re-profitable company. A few weeks back, the company spun-off ‘Sony Online Entertainment’ to an investment firm losing the company many exclusives for its PlayStation console. Today, for the same reason, Sony will now spin off its Audio and Video businesses by October 2015 in an effort to make the company profitable for investors. The company also plans to shrink its head office and avoid paying a year-end dividend for the first time.

After decades of losses, Sony CEO Kaz Hirai believes that if he slims down what Sony is building, the company can return to profitability after decades of losses. This also allows the company to focus on its growing profitable businesses. PlayStation, Image Sensor Unit (technology found in camera devices such as the iPhone) and Media, the companies TV programming division. The fate of Sony’s smartphone division is still unknown, with the possibility of a spin-off being debated as the company will no longer attempt for a sales growth in this area. The firms computer chips and batteries division are also likely candidates to be spun-off. The sales of Blu-ray discs are also declining, another issue the company will face.

Hirai believed that a “One Sony” vision was key years ago, however, now he’s realized this isn’t the case and is slimming down the company to only profitable divisions. If it isn’t making money, it’s gone. PlayStation is currently the companies most successful business with the PlayStation 4 doing exceptionally well, the entertainment giant must ensure the platform does well and isn’t held back by other parts of the company.

Kaz told investors that these spin-offs will help the company grow to an annual profit of 500 billion yen by the end of 2018 in comparison to the 20 billion yen it’s aiming to reach this year. The company will now focus on PlayStation, Media, Imagery with TV and Smartphones sitting under it. Sony Pictures still acts like an area of growth for the company, even after the recent cyber-attack on the division after the infamous film “The Interview” with caused issues with North Korea. PlayStation growth also continues for the company acting as another area where the company can continue to focus on.