In A Nutshell
Despite being known for a retinue of electronics products like the Walkman and the PlayStation, Japanese megacorporation Sony makes most of its money selling life insurance. In fact, the company loses billions on most of their gadgets.
The Whole Bushel
Asked to name an electronics company off the top of their head, a good percentage of people will name Sony. In 2013, the enormous Japanese corporation ranked 94 on the Fortune Global 500. They make all manner of gadgets, from televisions and computers to digital cameras. However, Sony’s electronics business has been an unmitigated disaster, losing $8.5 billion in the last decade. Perhaps the biggest part of Sony’s problem is its products rank as somewhat mediocre compared to those of competitors like Samsung. Sony has also failed to corner the lucrative smart phone market, dominated by giants like Apple and Motorola.
The company hopes that the new PlayStation 4 will breathe new life into its electronics division, but with immense research and development costs, the device may already be behind the eight ball. Its predecessor, the PlayStation 3, has never been profitable, despite redesigns to reduce manufacturing costs.
Financial consultants from investment banking firm Jefferies have indicated that Sony’s best move would be to dump its electronics business altogether in favor of more profitable divisions, including Sony Pictures Entertainment (responsible for producing smash hits like the Men In Black and Spider-Man franchises) and Sony Music (which encompasses labels like Columbia and RCA Records).
Surprisingly enough, the company’s biggest monkeymaker is its financial division, including Sony Bank and Assurance. Established in 1979, Sony Life Insurance Co. serves only Japan and the Philippines. In the last decade, life insurance has earned Sony $9.07 billion in operating profit.