Kutaragi Leaving Day-to-Day Sony Games Role

Sony Computer Entertainment announced today that Ken Kutaragi, widely known as the “Father of the PlayStation,” is leaving his day-to-day role running the Sony games unit. Kutaragi will remain on as chief executive of Sony Computer Entertainment and also become its chairman; however, his role as President of Sony Computer Entertainment will be handed over to Kaz Hirai, currently head of Sony Computer Entertainment America. Hirai’s role in the U.S. will in turn be taken over by Jack Tretton, currently executive VP and co-CEO of Sony Computer Entertainment America.

Kutaragi will continue to oversee the Sony Computer Entertainment group and, according to a company statement, will “exercise his power to reinforce and further accelerate the development of the PlayStation business.”

The move comes and Sony has faced a year of harsh criticism over delays and costs associated not only with next-generation Blu-ray disc technology, but also the development and oft-delayed launch of the PlayStation 3, which finally bowed in North American and Japanese markets this month, and is scheduled to hit Europe in March, 2007. The PlayStation 3 has faced a series of hurdles and setbacks, including long development time, record-setting consumer price tags (and Sony is reportedly taking enormous losses on every unit sold) and significant supply shortages, in part due to the system’s integrated Blu-ray disc drive. Despite Sony’s long-term domination of the console gaming market, analysts are skeptical how long the company may take to reach profitability with the PlayStation 3, particularly with stiff competition from Microsoft’s Xbox 360 and Nintendo’s new, inexpensive Wii.

Although touted as a move to re-enforce management and groom a next-generation of executives to lead Sony, the reshuffling is the latest in a series of professional setbacks for Kutaragi, who was once being eyed as a possible future president of Sony. In 2005, Kutaragi was demoted from the company’s board and replaced as the company’s head of consumer electronics.

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