Ken Kutaragi

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Ken Kutaragi
Born	August 8, 1950 (1950-08-08) (age 59) Tokyo, Japan
Occupation	Founder of PlayStation

Ken Kutaragi (久夛良木 健, Kutaragi Ken^?, born August 8, 1950) is the former Chairman and chief executive officer of Sony Computer Entertainment (SCEI), the video game division of Sony Corporation. He is known as "The Father of the PlayStation", and its successors and spinoffs, including the PlayStation 2, PlayStation Portable, and the PlayStation 3.

Kutaragi was closely watched by financial analysts who trace profiles of the losses and profits of the Sony Corporation. This has been attributed to the PlayStation franchise's high profit returns for Sony; it has been the key source of profit for the company. ^[1]

Ken Kutaragi is currently CEO of Cellius. He also founded a new internet company.

In 2009, he became a guest professor of Ritsumeikan University.^[2][3]

[edit] Early years

Kutaragi always had the desire to "tinker", often taking apart toys as a child to see how they worked. This curiosity carried from childhood, leading him as a teenager to learn the intricacies of electronics. Eventually, in fact, his love of electronics led to him enrolling in Denki Tsushin University, where he acquired an Electronics degree.

Immediately after graduation, Kutaragi began working for Sony in their digital research labs. Although at the time it was considered a radical decision, Kutaragi felt that Sony was on the "fast track". He quickly gained a reputation as an excellent problem solver and a forward thinking engineer, earning that reputation by working on many successful projects - including early liquid crystal displays (LCDs) and digital cameras.

[edit] Role in the gaming industry

In the late 1980s, he was watching his daughter play a Famicom and realized the potential that existed within video games. At that particular time, Sony's executives had very little interest in video games. Thus, when Nintendo expressed the need for a wave-table sound chip for its upcoming new 16-bit system, Kutaragi immediately accepted. Working in secret, he designed and built the chip, the SPC700. When they found out, Sony's executives were furious. Only with Sony CEO Norio Ohga's help was Kutaragi able to push the project to completion and keep his job.

Even while working with Nintendo, within Sony, gaming was still regarded as a fad and something looked down upon. Despite this hostile atmosphere to video games, Kutaragi managed to persuade Sony to fund his research into the Super NES CD (the device that would eventually become the PlayStation). Despite being considered a risky gamble by other Sony executives, Kutaragi once again had the support of Sony CEO Norio Ohga. The success of the PlayStation led to him heading up the development of more consoles like the PlayStation 2, and the latest console in the series, the PlayStation 3.

The commercial success of the PlayStation franchise makes Sony Computer Entertainment the most profitable business division of Sony. Despite being an upstart in the console market against veterans Nintendo and Sega, the first PlayStation displaced them both to become the most popular console of that era. The PlayStation 2 extended Sony's lead in the following generation, at one point holding a 65% market share with 100 million units shipped.^[4] Ken was recognized by many financial and technological publications for this success, most notably when he was named one of the 100 most influential people of 2004 in TIME magazine^[5] and the "Gutenberg of Video Games".

Since 1997, Kutaragi had been favoured to become the next Sony president. He enjoyed a close relationship with Sony CEO Norio Ohga, who had backed Kutaragi on the Sound Chip and PlayStation projects.^[6] Ohga's successor Nobuyuki Idei promoted Kutaragi to Deputy Executive President, Sony-Global Chief operating officer, and Vice-Chairman in 2003. However on November 30, 2006, Kutaragi was replaced as President of Sony Computer Entertainment by Kaz Hirai, the President of SCE America. Kutaragi was promoted to chairman of SCEI, and retained his position as chief executive officer of the group. On April 26, 2007 It was announced that Kutaragi would retire and instead take up the role of Honorary Chairman.

[edit] Assessment by industry analysts

Many analysts attributed his retirement to his speech at the Foreign Correspondents' Club in Tokyo, wherein he criticized Sony's policy of using proprietary technologies. Kutaragi implicitly criticized the company's use of DRM technologies in reference to Sony's failure to offer a compelling strategy to answer the rise of Apple Inc.'s iPod.^[7] This was seen as a break within Japanese corporate culture since employees rarely criticized their companies.

Although Kutaragi's leadership of consumer electronics was not successful, analysts also suspect that outgoing Sony CEO Nobuyuki Idei had set up Kutaragi to fail, given that both men had a cool working relationship. Idei assigned Kutaragi the tedious task of turning around the consumer division which had already been falling behind competitors such as Samsung in the LCD market.^[6] Kutaragi's rival for the top position, Howard Stringer, was given the less difficult assignment of the content business and his success at Sony BMG resulted in his promotion.

Sony Computer Entertainment, which Kutaragi has been heading since its inception, had a weaker year in 2004 after several years of solid growth.^[8] During that same year, Sony’s game sales fell to $7.5 billion from $8.2 billion, and its operating income slid to $650 million from $1 billion, losing $25 million in Q4 of 2004. This can be attributed partially to the over-saturation of the video game market and price wars which caused the PS2 to lose the top sales position for a time.^[9]

[edit] Seventh generation game consoles

Kutaragi has labelled the Xbox 360 as "just an Xbox 1.5" and stated that it was "only going after PlayStation 2".^[10][11] However, SCE Executive Tetsuhiko Yasuda does not consider Microsoft to be a competitor, and has said that they might consider working on games together.^[12]

On September 8 2006 Kutaragi admitted that the shortage of PlayStation 3 consoles to North America and Japan as well as the postponing of the consoles debut in Europe put Sony's strength in hardware in decline.^[13]

[edit] 2006/2007 SCEI management shuffle

On November 30, 2006, Kutaragi was replaced as President of Sony Computer Entertainment by Kaz Hirai, the President of SCE America. In addition to other management changes, Kutaragi was promoted to chairman of SCEI, and retained his position as chief executive officer of the group.^[14]

On April 26, 2007 It was announced that Kutaragi would retire and instead take up the role of Honorary Chairman. Taking over his position will be current SCEI president and CEO Kaz Hirai, who had been promoted to president and CEO.^{[15][16][17][18]}

[edit] See also

Wikiquote has a collection of quotations related to: Ken Kutaragi

• History of video games (16-bit era)
• List of computer and video game industry people
• SPC700
• Tokyo Game Show
• Kaz Hirai
• Howard Stringer
• Phil Harrison

[edit] References

[edit] External links

• KenKutaragi.com - Unofficial Ken Kutaragi Forum
• Playing His Way to the Next Level – By Jim Frederick, TIME (with reporting by Toko Sekiguchi), 2003
• Sony E3 Public Convention 2005, featuring Ken Kutaragi (starting at 05:15)
• Farewell, Father - By Rob Fahey, a retrospective on Kutaragi's career.