Sony shelves Kutaragi, possibly quitting console business!

Posted by Jason Triplett Thursday, November 30, 2006

We all know the sad truth behind the PS3. It costs too much to make, and there have been so many technical issues with it even after it's rather unseuccessful launch, that Sony was obviously headed into a downward spiral.

Following the failure of the PSP, and the imminent failure of the overhyped PS3, Sony has shelved Ken Kutaragi, the face of the PS3.

Reputable site Financial Times reports the following:

"Ken Kutaragi, the maverick Sony engineer behind all three generations of PlayStation games consoles, will on Friday become chairman of Sony Computer Entertainment in a management reshuffle that could foreshadow the company’s exit from video games hardware.

The surprise move, though technically a promotion, removes Mr Kutaragi from the day-to-day running of Sony’s games division at a critical moment.

With the PlayStation3 only just past its difficult launches in Japan and the US, Sony is desperate to ensure that its complicated machine triumphs in the holiday shopping season. The company described the changes as “strengthening” its management line-up.

In the longer-term, the PS3 faces stiff competition from Microsoft and Nintnedo and a European launch next March for which some analysts fear it is not fully prepared.

Replacing Mr Kutaragi as Sony Computer Entertainment’s global president and chief operating officer will be Kazuo Hirai, a veteran of SCE’s US division, who prematurely claimed four years ago that the era of console wars was over.

Investors know Mr Hirai as a slicker, more confident presenter than Mr Kutaragi. He is also understood to have stronger working relationships with American, European and Japanese games makers.

Analysts said that Mr Hirai’s promotion to a global role at SCE could mark a critical shift in management thinking, with Sony changing its emphasis so that the current generation of games console will be its last as a hardware manufacturer.

“The appointment of Hirai could be the start of a shift from hardware to software,” said Yuta Sakurai, an analyst at Nomura. “I cannot now imagine a PlayStation4.”"

So in a nutshell, financial advisors are now predicting that Sony will go the way of Sega, and just make software, which has always been their stronger point. I can't say we didn't see this coming. Sony has been in the red for years, hardly ever turning a profit in the videogame industry. Mark our words, this is the end.

For the full report from Financial Times, please visit the source link below!



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