Kutaragi Being Groomed to Replace Stringer - Pachter

December 01, 2006 | By: James Brightman

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Reports have been surfacing suggesting that Sony's management shuffle implies PS3 would be its last console. Wedbush Morgan analyst Michael Pachter, however, doesn't believe the shift of SCE chief exec Ken Kutaragi (right) has anything to do with PS4. In fact, he thinks Kutaragi may one day head up all of Sony. [Updated]

Yesterday the Financial Times published an article claiming that the recent Sony management shuffle has "sidelined" SCE Chief Executive Ken Kutaragi. "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," said the Times.

The article then went on to speculate that the PlayStation 3 might actually be SCE's last console and that the company would go the way of Sega—become strictly a software developer.

"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 PlayStation 4." Sakurai added that by putting Hirai in charge, someone whose focus has been on software and who has a good relationship with Phil Harrison, the president of SCE's worldwide studios, signals a change in Sony's approach to the video game industry.

Nevertheless, Kutaragi will still have a tight grip on Sony's gaming division. And down the line Sony may have even bigger plans for the "father of the PlayStation."

Speaking to GameDaily BIZ about the management shuffle, Wedbush Morgan Securities analyst Michael Pachter said, "I think it's prudent succession planning. Kutaragi is the visionary, and his work on PS3 was done at launch. They need to groom him to replace Stringer. The rest of the guys are competent, experienced, and loyal. I think each of the other moves made sense. In time, I think you will see Kutaragi given responsibility for other functions, like Blu-ray."

As Sony President Ryoji Chubachi explained it to the Nikkei, "Mr. Kutaragi's strength is his knowledge of technology. His position is, of course, chief executive, but this means he will especially be looking closely at the area of technological development."

[UPDATE] GameDaily BIZ also spoke with Lazard Capital Markets analyst Colin Sebastian who saw the moves as a positive for Sony. "I think this has been in the planning stages for some time," he said. "Sony's challenges with Blu-ray and the cell processor have been well documented, and I think they will benefit from Kaz's fresh perspective on a global basis, and Jack [Tretton]'s insight and perspective in North America. I highly doubt any suggestion that this means Sony is considering any radical changes to its PlayStation business."