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Sony Executive Shuffle

5 Dec, 2006 By: John Gaudiosi

Sony has promoted Kaz Hirai from head of Sony Computer Entertainment America (SCEA) to president and group COO of Sony Computer Entertainment (SCE) in Tokyo. Jack Tretton, formerly EVP and co-chief operating officer at SCEA, will replace Hirai as president and CEO of SCEA. Ken Kutaragi, who is considered the “father of the PlayStation,” has been named CEO of the entire SCE Group.

Sony also announced the appointment of Akira Sato, member of the board of directors, as vice chairman, and David Reeves, president and CEO and co-COO of Sony Computer Entertainment Europe (SCEE), as deputy president of SCE in addition to his current responsibilities. Masaru Kato will remain in his current position as deputy president and group CFO.

The shuffle, in part, replaces some executives who have retired from the parent company recently. Colin Sebastian, video game analyst for Lazard, said that Hirai should bring fresh perspective to Sony on a global basis, after the hardware giant has dealt with challenges from both its Blu-ray Disc technology and the cell processor that powers PlayStation 3.

Michael Pachter, video game analyst for Wedbush Morgan Securities, said the move away from operations should free up Kutaragi to participate as a member of Sony's executive committee. In fact, Pachter believes Sony could be grooming Kutaragi to replace Sony CEO Howard Stringer, when he decides to retire. He said Kutaragi, who built the PlayStation business from the ground up, would be the perfect man to lead the company going forward.

Kutaragi has been at the center of Sony's PS3 launch problems, which resulted in Sony shipping less than half of its promised 400,000 hardware units at launch in the United States and has put in jeopardy reaching its original goal of 2 million units shipped worldwide by the end of this year.

A recent breakdown of PS3 hardware by iSuppli found that Sony loses $306.85 per $500 PS3, which has a 20GB hard drive, and $241.35 per $600 PS3, which has a 60GB hard drive and built-in Wi-fi support.

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