Sony Corp. announced Wednesday it had made Sony Financial Holdings Inc. a wholly owned subsidiary, a key step in the group's reorganization that aims to drive "further opportunities for synergies" in its businesses and develop new growth.
Sony -- which started as a home electronics manufacturer but has since expanded into video games, music, movies, financial services and other businesses -- will change its name to Sony Group Corp., effective April 1, 2021, and implement a series of changes to its organizational structure.
Sony Financial Holdings has Sony Bank and Sony Assurance Inc. under its umbrella. Sony had held a stake of about 65% in Sony Financial as of May, and spent about 400 billion yen buying up stocks through a tender offer between then and July.
As a result of this acquisition, Sony Financial was delisted from the Tokyo Stock Exchange at the end of August. This also ended the situation in which a parent company and its subsidiary were both listed on the TSE.
The switch to the Sony Group name will emphasize its focus on being the headquarters of the group. The subsidiary that operates the consumer electronics division, which was the core business of Sony at its inception, will be called Sony Corp. The company's name change will be its first since 1958, when Tokyo Tsushin Kogyo was renamed Sony Corp.
Sony had created many innovative home appliances and electronics, including Japan's first transistor radio and the Walkman, the original portable music player. But in recent times, Sony has failed to release hit products that dominate global markets and found itself being overshadowed by companies such as Apple Inc. of the United States and South Korea's Samsung Electronics Co.
In Sony's consolidated accounts for the business period ending in March 2020, its electronics products and solutions business accounted for only about 10% of its operating income. This proportion was significantly smaller than its financial services and game and network services.
Sony's new organizational structure will separate its founding electronics business, which it had been partial to, from the head company. Alongside it will be placed newer pillars such as game and network services, pictures (which includes movies) and financial services, for integrated management of these operations.
--Software doing well
The novel coronavirus pandemic has increased the importance of a new management structure across the entire group. While sales of hardware such as electronics are tipped to drop due to the impact of factors such as people staying home more during the outbreak, subscription services that allow users access to video games and music have been solid.
At a time when the earning environment is unclear, Sony aims to "further opportunities for synergies" among its businesses. Sony will harness its expertise in the financial industry and its technologies, such as its FeliCa contactless IC card, to also develop fintech services that mesh information technology with banking and financial services.
Sony also is considering stepping into new fields. In July, it unveiled in Japan for the first time its Vision S, an electric concept car that incorporates Sony strengths such as high-performance image sensors, autonomous driving technology, and music and video functions. Although Sony reportedly has not set a schedule for putting this vehicle on the market, it will conduct a trial run on public roads in Japan during this fiscal year, which could lead to the future commercialization of related technologies.
"In order to strengthen the management of this business and increase the corporate value of the entire Sony Group, we have decided to make it into a wholly owned subsidiary," Sony Chief Executive Officer Kenichiro Yoshida said.
Read more from The Japan News at https://japannews.yomiuri.co.jp/
