Recent rumors that Sony was considering a plan to split up its entertainment and electronic divisions into separate companies have been stoked by reports that the Japanese giant has hired financial experts for help.
According to Bloomberg, Sony has already brought financial companies Citigroup and Morgan Stanley on board to determine whether they should move ahead with the split-up plan. None of the three companies commented on the report or the Sony split-up plans.
The idea first emerged earlier last month, when Sony shareholder and billionaire hedge fund manager Daniel Loeb proposed an initial public offering of the company’s entertainment division. Loeb, who holds a 6% stake in the company, insisted that Sony should sell up to 20% of its assets in the IPO.
CEO Kazuo Hirai has so far refused to make any clear comments on the plan, saying that no decision has been made as of yet. But the company will carefully consider Loeb’s plan, Hirai added.
Sony and PlayStation fans might not be aware, but the company has been reporting losses over the last eight to nine years, most notably because its electronics division is faced with ever growing competition and Sony electronics are losing ground to companies such as LG and Samsung.
A split would allow the company to focus more on the electronics business and make it profitable again. In the last year, the company’s main source of income was the entertainment section and more specifically, its film business. One of the highest-grossing films of last year, James Bond movie Skyfall, was produced by Sony.
The entertainment branch of the business would retain all PlayStation properties and the music and film business. At the moment, PlayStation is bringing a lot of money in for Sony, but it is unclear whether the entertainment division would be able to actually sustain itself with what it earns.
PlayStation remains one of Sony’s most popular products. The console series is the best sold worldwide, but lately, it has been losing ground to its rival, Microsoft’s Xbox. It remains to be seen how the upcoming PlayStation 4 will fare against Xbox One when both next-generation consoles are released this year.
[Image via BGR]