Game over for Sony PlayStation boss

Ken Kutaragi will step down as chairman and CEO of Sony Computer Entertainment in June

Ken Kutaragi, the man who led Sony into the game console business, will step down as chairman and CEO of Sony Computer Entertainment (SCEI), the company said late Thursday.

Kutaragi announced his intention to step down during an SCEI board meeting in Tokyo on Thursday and said he had been considering the move for some time, according to a Sony spokesman.

Until recently Kutaragi served as president and CEO of SCEI but a management shake-up in late November, just weeks after the launch of the PlayStation 3, saw the president's job given to Kaz Hirai and Kutaragi made chairman. Typically the president handles day-to-day operations at a Japanese company and the chairman's position is filled by a former president ahead of their retirement.

That move was viewed by some analysts as a response to several missteps in the launch of the PlayStation 3. The launch date was delayed and the console was widely criticized as being too expensive, a view Sony appeared to accept when it took the unusual step of cutting the price of one of the two PlayStation 3 consoles ahead of its launch in Japan.

Kutaragi's retirement will be effective from June 19, which is when SCEI holds its shareholder meeting. He will stay on as honorary chairman of SCEI and will also become a senior technology advisor to parent company Sony.

Hirai, who is currently president and group chief operating officer, will be promoted to president and group CEO.

"I am happy to graduate from Sony Computer Entertainment after introducing four platforms to the PlayStation family," Kutaragi said in a written statement. "It has been an exciting experience to change the world of computer entertainment by marrying cutting-edge technologies with creative minds from all over the world. I'm looking forward to building on this vision in my next endeavors."

He didn't provide details of what his next move would be.

Nobuyuki Idei, the former Sony chairman who stepped down amid a big management reshuffle in 2005 went on to form his own technology consultancy. Idei also serves on the boards of several companies including Accenture and other business panels.

Sony entered the computing gaming business in 1994 with the launch in Japan of the PlayStation. The console proved a hit selling 300,000 units by the end of the year. It was launched in the U.S. and Europe the following year.

The success spurred Sony to launch the PlayStation 2 in 2000. The console further solidified Sony's position in the gaming market and pushed Sega to exit the console business.

In 2004 the PlayStation became the first console to sell more than 100 million units. That feat was matched a year later by the PlayStation 2.

The company's latest console, the PlayStation 3, hit shelves in Japan on Nov. 11 and those in North America shortly afterwards. However, component shortages meant the European launch was delayed until March. The launch hasn't gone as well as Sony had hoped, in part because of the success of Nintendo, which has managed to outsell Sony to-date with its Wii console.

Behind the current battle are two very different strategies. Sony has gone for raw power, focusing on high-definition and fitting out the console with a powerful processor and a Blu-ray Disc drive, while Nintendo has spent much effort trying to make the gaming experience more fun without necessarily wowing the gamer with technology. The Wii's innovative motion-sensitive controller and considerably lower price tag are the result of that latter thinking.

Nintendo said earlier Thursday that it shipped 5.84 million Wii consoles in the period from its launch late last year through the end of March. Sony is due to announce PlayStation 3 shipment figures for the same period when it discloses its fiscal results in mid-May.

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Martyn Williams

IDG News Service

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