The Sony media tail was wagging the Sony hardware dog. That was the whole problem - they hamstrung their own products. End result was that they burned their own brand to the ground - there was a time when Sony hardware was cool.
What's really sad is that the entire reason Sony bought the media companies was to prevent them from interfering with new Sony hardware innovations. The record companies resisted the audio CD and the studios resisted Betamax. Sony seems to have forgotten this after Akio Morita stopped running things.