What Are their New Sources of Revenue?

Poorly-performing Japanese IT companies are spurring the development of their businesses related to healthcare, including Sony suffering from a weak performance, and Nintendo on the brink of closing its business because of recording losses for the third straight year.

According to overseas media outlets and industry sources on February 3, Sony, Toshiba, Hitachi, and Mitsubishi are strengthening healthcare-related businesses in the belief that the medical field is stable in price, and their high technologies in video or IT can be utilized in the field. 

For example, Sony is committed to its medical device business, as shown by Sony CEO Kaz Hirai’s reference to the field as the future pillar at the time of his inauguration in 2012. In April 2013, it created a joint venture with optical equipment maker Olympus Corp., pushing ahead with the development of new products that combine cutting-edge technologies such as 4K and 3D, which are next-gen ultra definition video specifications in the field of the surgical endoscopy. 

This year, the company will launch human genome analysis operations by establishing a joint venture with US-based Illumina Inc, the world’s best genome sequencing equipment maker. The joint venture, called P5 Inc, is scheduled to be set up in Tokyo at the end of February with a plan to analyze genome data and sell information to drug-makers or research institutes in Japan. In the long term, P5 Inc is going to provide custom-made medical services by constructing a genome information platform that combines genome data accumulated with its cloud technology and medical information. Though this medical business, Sony is aiming to achieve more than 200 billion yen (2.13 trillion won, US$1.97 billion) in sales by 2020. 

Toshiba, on the other hand, is accelerating the establishment of overseas bases and the launch of new products mainly in the field of medical imaging equipment, such as computed tomography (CT) and magnetic resonance imaging (MRI). It intends to increase sales of its medical business from 400 billion to 1 trillion yen (10.7 trillion won, US$9.8 billion) by 2017. Last year, it created Toshiba Medical Systems Korea by purchasing a 100 percent stake in TI Medical Systems, which was set up by Toshiba and INFINITT Healthcare in 2009. 

Meanwhile, Hitachi and Mitsubishi are reportedly focusing on the development of large-size cancer-treating equipment, which are valued at tens of billions of yen per unit. 

Nintendo also announced at the January 30 event for publicizing its business strategy that it will start a healthcare business in 2015 to make up for losses incurred in recent years. The video game company is going to release specific plans within the year. 

Nintendo CEO Satoru Iwata said, “We will showcase a new service in a non-wearable form integrating hardware and software, which enables people to enjoy games and promote health at the same time.”