Transformation "Sony" The reason for the stock price of 10,000 yen for the first time in 19 years January 25, 20:47

"Finally, finally." I heard these words from Sony employees.

On December 17, last year, Sony's stock price exceeded 10,000 yen.

This is the first time in about 19 years since 2001.

During this time, Sony experienced a deep era.

Despite being regarded as one of Japan's leading electronics manufacturers, it suffered from price competition with overseas manufacturers in "manufacturing" such as TVs, and posted a huge deficit.

The stock price temporarily fell below 1,000 yen, and was sometimes talked about as a symbol of Japan's stock price slump, such as "Sony shock."

Since then, it has promoted a shift in its business model through the sale of the once shining personal computer and battery businesses and the reduction of personnel.

The result is "a stock price of 10,000 yen for the first time in 19 years."

How has Sony changed?

And where are we going in the future?

(Hidetoshi Inomata, Reporter, Ministry of Economic Affairs)

To a "content" company

Last year, the popular anime "Kimetsu no Yaiba" that caused a social phenomenon.

The box office revenue of the movie version reached 32.4 billion yen in 73 days from the release, and it was the number one movie screened in Japan.

It was Sony that supported the success of this anime, which caught the hearts of many people even in the adversity that tends to make it difficult to go to the cinema due to the corona wreck.

It was planned and produced by the group company "Aniplex".

The theme song by LiSA sold by Sony Music was also a hit.

The content businesses such as anime, movies, music, and games that Sony has been focusing on have produced synergistic effects.

In fact, it is these content businesses that support Sony's business performance.

The "PlayStation 5", which was released as a new game console for the first time in seven years last year, is also a kind of content business that connects to the Internet and lets you download and buy software.

Of the sales of 8,259.8 billion yen in 2019, the total of games, movies, and music accounts for 45%, which is almost half of the total.

Electronics such as TVs and portable music players account for 24%, and Sony can now be said to be a "content company."

We are also actively engaged in M ​​& A in this field.

Last year, it decided to acquire the animation distribution business "Crunchyroll" developed by American telecommunications giant AT & T for more than 120 billion yen.

Crunchyroll distributes anime and other music in more than 200 countries and regions around the world, and has about 90 million members.

Netflix, Amazon, and Walt Disney are leading the way in video distribution, but the acquisition is trying to acquire these members and viewing data to cultivate the global anime market.

Lessons from "Sony Shock"

Behind the shift to the content business is the lesson of the "bottom era."

On May 25, 2001, when the stock price exceeded 10,000 yen, Sony's flat-screen TVs, personal computers "VAIO", and MD players were lined up at home electronics mass retailers.

Of the sales of 7,314.8 billion yen in 2000, electronics accounted for about 70%, games accounted for 9%, and movies and music accounted for only 8% each.

Since its founding, no one doubts that Sony, which has produced epoch-making products such as the Walkman one after another and was responsible for "Made in Japan", which is synonymous with high quality, is a "manufacturing" company.

However, this year, due to the slump in electronics, the earnings forecast was revised downward, and the stock price fell below 4,000 yen.

The cause was intensifying global price competition.

With the digitization of home appliances, Japan's strength in the analog era, "grinding" manufacturing, has lost its advantage.

The difference in quality with Korean manufacturers has narrowed, and prices have been rapidly reduced.

I couldn't keep up with the so-called commoditization of home appliances.

It was the 2008 Lehman shock that put an end to it.

The global economy has deteriorated, and demand for home appliances has disappeared.

It has fallen into the final deficit for four consecutive terms since 2008.

In 2012, when the final deficit of 456.6 billion yen (2011), the largest ever, was announced, the stock price finally fell below 1000 yen.

From this bitter experience, Sony has learned that growth cannot be expected unless we focus on products that are recognized for their high value and are not involved in price competition.

Therefore, we embarked on structural reforms to promote selection and concentration.

In 2013, the Minokamo factory in Gifu prefecture, which was making videos, was closed.

Withdrew from the personal computer business "VAIO" in 2014.

In 2017, it also withdrew from the lithium-ion battery business.

It also made a large-scale reduction in personnel.

On the other hand, TV did not pursue its market share and switched to a strategy that specializes in high-priced products, and managed to turn a profit.

At the same time, the content business has been positioned as a new pillar of earnings.

Instead of selling hardware such as home appliances, we aimed to shift to a business model in which software = content continuously raises sales.

For example, in the wake of anime hits such as "Kimetsu no Yaiba," related content is released in music and games, and sales are increased through synergistic effects.

We also combined a so-called subscription service that charges a fixed amount every month.

In the game business, instead of selling game consoles and game software on a one-off basis, we have created a system that allows users to use the software via the Internet, and have come to maintain a connection with users.

There are now about 46 million paying members worldwide to enjoy software on the PlayStation, which is a stable source of revenue.

Target EV market

Next to the content business, Sony's current major revenue source is the image sensor business.

Although it is a "part" that is difficult for the general consumer to see, it boasts the top share of the world market last year with 50%.

At CES, the world's largest technology trade fair, Sony unveiled a driving test of an autonomous EV (electric vehicle) under development on public roads.

It also coincided with the timing when the information about whether Apple would enter the EV was transmitted, and it attracted attention.

In this car, the image sensor holds the key to automatic driving, and it reads the road conditions and the facial expression of the driver in real time, and automatically supports the operation of the steering wheel and brakes.

Demand for image sensors has expanded with the spread of smartphones, but if they are adopted in autonomous driving technology, the market will expand further.

Izumi Kawanishi, the executive officer in charge of development, is enthusiastic.

Executive Officer Kawanishi

"Development of autonomous driving EV requires technology to sense the surroundings, technology to control vehicles, and technology to link with social infrastructure, and comprehensive strength is required. Automobile transformation once every 100 years I want to challenge with high goals what Sony can do in the period. "

The future of the new "Sony Group"

In April, Sony changed its name to "Sony Group" and made a new start.

The electronics of the original business will be placed under the umbrella of the holding company like many other businesses, but the future business environment can never be optimistic.

In the content business, in order to compete with the huge rivals ahead, we must continue to produce excellent content that is world-class.

Even with the image sensor that boasts the top share, Samsung Electronics of South Korea and others are trying to catch up.

And above all, it is also necessary to grow new business buds that can become a pillar of profits in the next era.

What course does Sony take?

It has a big impact on Japanese companies and the economy, so keep an eye on it.

Hidetoshi Inomata,

Reporter, Economic Department

Joined in 2012

After working at the Hakodate Bureau and Toyama Bureau, he

was in charge of the material manufacturer and apparel industry of the heavy industry

he currently belongs to

, and is currently in charge of the electrical equipment manufacturer.