GOODBYE TO A PRODIGAL SON

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Sony's big problem, however, is that it risks losing its role as a leading-edge producer of electronic equipment. It has fallen behind Time Warner and Toshiba in the race to set the standard for a successor to the videocassette player called the digital video disc, which offers sharply improved picture quality. And some experts are scathing about Sony's plans to develop its own brand of personal computers with chipmaker Intel. Says Bibb: "The profits are going to hell in the PC market."

Whether Idei wins his hardware bet remains to be seen, of course. But Sony continues the lavish spending on software that Schulhof charted. Last week Variety reported that TriStar agreed to pay Tom Cruise $20 million up front to star in the comedy Jerry Maguire. It was the third $20 million payday that Sony has recently served up to top Hollywood talent.

--Reported by Sam Allis/Boston, Patrick E. Cole/Los Angeles and Edward W. Desmond/Tokyo