The $6.1 billion MCA buy, and a five-year retreat: breaking with the “Konosuke line” (1990)

What it means for a hardware company to own software

The lesson of this decision lies less in whether the business was good or bad than in the difference in business logic. Matsushita’s strength — turning factories to make good products cheaply and in vast quantity — did not carry over intact to Hollywood, where value is created by the relationships of talented individuals. What divided the wisdom of the acquisition was not the size of the sum but the very stance of trying to measure a business that runs on a different logic with one’s own yardstick. That the cautious, steady Matsushita behaved most boldly in the field least familiar to it is where the twist of this decision can be seen.

What is interesting is that Matsushita — Panasonic did not, thereafter, give up on software itself. What it bought in 2021 for about $7.89 billion was not film but supply-chain software. That acquisition, choosing a field directly connected to the manufacturing floor that is its core business, can be read as an answer, a quarter-century on, to the “danger of an acquisition far from the core” it had felt keenly with MCA. More than what you buy, whether you can handle what you bought with your own logic — MCA left that question behind, at a high price.