To expand, they're not bad at software per se, but they missed the boat on the idea of connected devices and the whole ecosystem that Apple and Google have done so very well.
Japanese phones were several years more capable than the first few iPhones and at the time it was thought that Japan would never use them. What changed that was how much better a phone was when it connected to a store to buy apps and games. Competition purely on electronics doesn't cut it anymore.
It's a shame Sony didn't realise this sooner, they've made phones, laptops, game consoles, music players for years. They should have been in the position to do the iTunes store or Apps way before Apple. They seem to only be trying to do such a thing now with bolted on crap like replay sharing on PS4.
Even after an edit you seem to have missed that Sony also own global movie and TV studios.
However they lacked the internal structure and strategy to really deploy them effectively. Plus someone would have had to choose a suboptimal strategy for their division's financial results if they were to avoid selling some rights or exclusivity externally but to use it for joined up strategies. (Or the low profit hardware arm would have had to paid commercial rates.)
It also surprisingly gets harder in many ways to negotiate for other rights when you have your own studio/record label and who wants to only watch/listen to Sony content. Anti-trust law may be a factor in this (as a content owner Sony couldn't legally do an Apple and tell their competitors what pricing model to accept) but also it changes the tone of the negotiation and attitude of other parties when they are your competitor.
And finally just when the network technology and the products are getting to the point where a useful internet delivered content ecosystem can be established somebody high up the organisation decides to split the platform and bend over for Google in order for the honour of making the Google TV for US only under ridiculous contract terms based on Intel hardware costs and to be supported by a dreadful marketing campaign it still sows FUD amongst content partners.
[Former Sony (Software Engineer, Product Planner, Biz Dev - all in European TV business)].
Firstly I didn't say it would be impossible just potentially harder than if not a competitor.
I don't know the history of Steam that well but my understanding was that it started as an easy way to get their own games. Yes Sony Music could have done the same (maybe they did but I can't remember) but a store with a seemingly random selection of about 25% of pop music doesn't make a great hit in the era of Napster and when they are still pushing DRM (which Steam also uses).
I don't believe that as a company with about 25% of the music market could legally impose pricing conditions on it's competitors (Valve may allow flexible pricing but iTunes did not at least at the beginning and I don't believe was such a proportion of the market at the time).
It might not make sense for sony to make one device that would replace many, with most money for the software going to other people. This is a classic innovator's dillema.
Also they did build the first ebook reader, but they lost to the kindle. Since the ereader is mostly about building ecosystems, maybe the same would have happened to them with app stores ?
Well that's exactly my point with the eReader. They did the hardware (in most regards better than Amazon) but because they didn't do much for past-sale services they ultimately lost out.
The viewpoint of things as stand alone devices has ruined them. It's not necessarily to do with one device to replace many (smart phone to replace PDA, walkman and laptop for example - they ultimately did that) but that couldn't tie them all together. Anyway, if they don't cannibalise their own products, someone else will (and did). It's only short term profit focus that scares them from doing so.
Japanese phones were several years more capable than the first few iPhones and at the time it was thought that Japan would never use them. What changed that was how much better a phone was when it connected to a store to buy apps and games. Competition purely on electronics doesn't cut it anymore.
It's a shame Sony didn't realise this sooner, they've made phones, laptops, game consoles, music players for years. They should have been in the position to do the iTunes store or Apps way before Apple. They seem to only be trying to do such a thing now with bolted on crap like replay sharing on PS4.
Edit: Sony have a record label as well!