Sony is effectively no longer an electronics company

With the divestiture of the A/V group, the company is mostly a movie studio and game company.

We've mourned the passing of RadioShack as the end of an era, and now comes a second ending. Sony, the Japanese giant that was once the king of consumer electronics, is now basically a movie studio and videogame company.

The company announced last week that it would spin off the audio/video businesses that makes home theater equipment, receivers, DVD players, cameras and music players into a separate wholly-owned subsidiary.

Sony has already done something similar with its television business, which was getting massacred by Korean competitors Samsung and LG along with the upstart American firm Vizio. And before that, it dumped its PC business to the Japanese investment fund Japan Industrial Partners (JIP) in 2014.

In announcing the divestiture, CEO Kaz Hirai said the company was also considering selling off its smartphone division, which is primarily a Japanese play, although they are sold in the U.S.

So what's left? Well, Sony has a profitable imaging business that includes high-end cameras and image sensors used in the iPhone. The iPhone is the only major customer, as Samsung uses its own sensors for the Galaxy phones.

After that is Sony Music, Sony Pictures, which just went through a huge hacking scandal that saw its chief, Amy Pascal, step down, and the PlayStation business. That's it. Sony is music, movies and videogames. And even there it's paring down, as it just sold Sony Online Entertainment, which makes MMOs like EverQuest, to the investment firm Columbus Nova. The first thing Columbus did was fire a huge chunk of the development staff.

So what happened? Sony was mismanaged for a long time, no question about that. Its products were overpriced and the Koreans came in and ate their lunch. Yes, a Sony TV set is gorgeous and looks a little better than a Samsung, but when the Samsung is 30% cheaper and looks good enough, Sony loses out on the quality argument.

It expended a lot of capital on the high-definition DVD fight, eventually defeating HD DVD in a Pyrrhic victory because streaming has put home video rental stores out of business. Home video is in rapid decline and people just stream video now.

And in an iPod world, home theaters just aren't popular any more. People are listening to music on their smartphone, tablet or PC and not interested in an expensive amp, CD player and floor speakers.

Considering the state of the music industry in general, with plunging CD sales and digital sales not picking up the slack, Sony Music probably won't be a profit driver, either.

Sony was about high quality products at a premium price. In a "good enough" world, that's not good enough.

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