Sony is restructuring parts of its financial services arm

The company hopes the move will bolster its chip and entertainment business.

Sony has been aggressively growing its entertainment and electronic equipment segments in the last couple of years. In a new move, the company plans to divest some of its other business to fund growth for these two divisions.

Sony will be relisting its Financial arm as a publicly traded company.

The Japanese multinational conglomerate is looking to spin off and relist shares for its financial unit to pump new investment into its image-sensing and entertainment businesses. The Sony Financial unit operates the online-only Sony Bank, life and non-life insurance, nursing care, and venture capital.

Sony shared the plan during a recent strategy briefing with investors. According to the plan, the company will retain under 20 percent of its Financial Services arm. The proceeds of the sell-off will be used to fund various investments, most notably in the image sensor division.

Investors welcomed the new direction that Sony is taking. The company’s shares jumped 7.3 percent when the new strategy was announced. This is the biggest intraday surge that Sony has had this year.

"Sony’s image sensor and entertainment businesses will need much bigger investment in the future. Meanwhile, you need a strong base for financial services," Chief Operating Officer Hiroki Totoki said of the restructuring plans. "That’s why we decided to consider using a virtual spinoff — which allows us to keep Sony’s name on the financial service arm while it gains the ability to raise cash independently."

Sony is looking to make more investments in its entertainment division.

Sony spent $3.7 billion to gain full control of its financial unit in 2020. Many questioned the takeover as the subsidiary did not synergize with Sony’s other existing businesses. There has been pressure on the company to break up its financial services arm and focus on growing its imaging and entertainment business.

Sony has been making huge acquisitions in the entertainment industry. The company purchased EMI Publishing for $2.3 billion and acquired anime streaming service Crunchyroll for $1.2 billion.

Sony has also been very dominant in its image sensing and imaging divisions. Sony sensors are widely used in digital cameras, smartphones, drones, and even self-driving vehicles. The company is also enjoying huge market shares in its photography and videography segment with its mirrorless cameras.

Sony is also the world's biggest manufacturer of imaging sensors.

The company is also heavily invested in turning its video game IPs into successful movies and TV shows. HBO’s The Last of Us TV series and the movie Uncharted were released last year and have been commercially successful. The company is working on several other live-action adaptations including Gran Turismo, Twisted Metal, and Ghost of Tsushima. Aside from video game adaptations, Sony is also focusing its efforts on building the Sony Spider-verse with movies like Spider-Man: No Way Home and Spider-Man: Across the Spider-Verse

Sony’s new strategy bodes well for the future of its entertainment and tech businesses. For consumers, it means better movies, music, and electronic devices. We hope this new direction also includes the gaming segment.

Darryl Lara

Darryl has been gaming since the early 90s, loves to read books and watch TV. He spends his free time outside of gaming and books by riding his motorcycle and taking photographs. You can find Darryl on Instagram. Check him out on Steam and Xbox too.