The last time Sony held this much value on the stock market, Bill Clinton was in the White House, and the PlayStation 2 was making its debut on American shelves. Fast forward to today, Sony has transformed itself into a major player in entertainment, shaking off decades of stagnation and finding new ways to connect with audiences.
Once a titan of consumer electronics, Sony saw its dominance wane as it missed the smartphone revolution. While the PlayStation line remained profitable, rising production costs for other electronics and shrinking demand took a toll. Now, Sony is reinventing itself, evolving from a hardware-first company into a global content and entertainment powerhouse.
Turning the Tide
Sony’s strategy is working. According to the sources of Leaders team, after years of declining stock performance, the company is enjoying newfound investor confidence. In Japan, Sony’s stock recently hit its highest level since March 2000, signaling optimism about its shift toward entertainment.
“If you look back 30 years, Sony was known as an electronics company selling hardware,” said Damian Thong, a research equity analyst at Macquarie. “Today, its profits primarily come from entertainment—games, music, TV, and movies.”
Sony Group, Japan’s third-largest company by market value, has been doubling down on its entertainment businesses. Acquisitions like Anime streaming service Crunchyroll in 2021 and U.S. video game developer Bungie in 2022 have expanded Sony’s intellectual property portfolio. Beyond PlayStation, Sony’s reach extends into film through Sony Pictures and music via Sony Music, which owns Columbia Records.
As per the sources of Leaders team, a pivotal moment came when HBO’s adaptation of Sony’s hit game The Last of Us won eight Primetime Emmy Awards. The achievement showcased Sony’s ability to leverage its intellectual property across mediums, from gaming to television.
A New Era of Synergy
Sony’s pivot toward synergy among its subsidiaries has been key to its success. “The Last of Us” TV adaptation was a triumph, but it’s only part of a broader strategy to license Sony’s intellectual property and content to streaming platforms, bypassing the need for its own streaming service.
According to Robert Lawson, Sony Group’s chief communications officer, the company has invested about 1.5 trillion yen into content intellectual property since 2018. This shift has doubled the contribution of its entertainment division to overall revenue, now accounting for 60%, up from just 30% a decade ago.
From Hardware to Hits
Sony’s story began in 1946 as Tokyo Telecommunications Engineering Corporation, which pioneered innovations like Japan’s first magnetic tape recorder. In the decades that followed, Sony became synonymous with consumer electronics, introducing icons like the Trinitron TV, the Walkman, and the CD player.
The 1990s saw the debut of the PlayStation, a game-changing move that cemented Sony’s place in the gaming world. Today, the PlayStation 5 outsells rivals like Microsoft’s Xbox and Nintendo’s Switch, according to Ampere Analysis.
Sony isn’t just focused on consoles. It’s branching into PC gaming with titles like Helldivers 2 and exploring new ways to distribute its games. Joost van Dreunen, a professor at NYU Stern, notes, “The games business is spreading out its IP, finding new audiences, and expanding customer reach.”
Challenges and Opportunities
Not every venture has been a win. Recent flops, like the rollout of the Concord game and a lackluster Spider-Man film, highlight the risks of innovation. But these stumbles are manageable for a company with deep pockets. Sony has allocated 1.8 trillion yen ($11 billion) for acquisitions and stock buybacks through March 2027.
Looking ahead, Sony is exploring more adaptations of its gaming franchises for film and TV. Following the success of The Last of Us, a God of War adaptation is in the works, set to release next year.
Entertainment Over Electronics
Sony hasn’t completely abandoned its electronics business, continuing to produce high-end cameras and image sensors for companies like Apple. However, the mass consumer electronics that once defined the brand are now secondary.
In 2025, Sony plans to spin off its online banking and insurance units, focusing even more on its entertainment offerings.
This renewed focus has paid off: Sony’s stock has surged nearly 18% in the past month, outpacing entertainment giants like Disney and Netflix. With its roots in innovation and a bold new vision for the future, Sony is proving it can not only adapt but thrive in an ever-changing industry.
