Kutaragi to Step Down From Sony


In an announcement that shouldn’t surprise regular GigaOM readers in the slightest (warning signs emerged as far back as last February, and reached crescendo pitch in November and December), Sony Computer Entertainment Inc. just announced that CEO Ken Kutaragi, the “father of the Playstation”, will leave his post in June and become an “honorary chairman of SCEI”.

By most appearances, his new title will be an “emeritus” position in the sense attributed to Rupert Murdoch, when he showed a Newscorp exec the door: “The ‘e’ means you’ve been given the elbow and the ‘meritus’ means that you bloody deserve it!” Unsurprisingly, most analysts attribute the departure to the Playstation 3’s poor performance against the Wii, and worst blow of all, as compared to the Xbox 360.

Not entirely deserved, however, for despite the numerous missteps in its development, pricing, and marketing, the PS3 ultimately failed because Kutaragi succeeded with the PS2 so well. Though seven years old now, the Playstation 2 is still selling better than the Playstation 3; with a 116 million+ installed base, a massive library, and a list price under $100, there’s little incentive for Playstation fans to spend $600 upgrading. (Especially when quality backward compatibility was in doubt.)

So there’s tragic irony in Kutaragi’s departure. Having transformed videogaming into a truly massive entertainment medium, he seems to have assumed that the market he did so much to create would follow him to the next level.

As IDC analyst Billy Pidgeon put it to the AP, “Sony didn’t notice that their audience was dwindling and didn’t increase the base by playing to a wider demographic, and instead it played the old-school game of playing to the 18- to 32-year-old male early adopter.” But in those seven years, the young men who had eagerly snatched up the PS2 were now having kids of their own, making them ripe targets for a console that could appeal to their whole family. So rises the Wii– and so goes Kutaragi-san.



Its not rocket science, its just plain fact that most people are note gonne spend £400 on a console. Seriously, what were they thinking????


Here in the uk it’s simply failing because the price is more than most peoples monthly mortgage payments, ps1 and ps2 done so well because they hit the disposable income markets a generation who had grown up with video games and were now adults with jobs and the money to pay for them. But the ps3 is simply a price hike too high, unless your a “serious” gamer most people just arn’t bothered. Some places were selling the ps3 on it’s release at over £500!

Adam Blake

The PS3 can be considered a failure because it has failed to accomplish the goals it was designed to accomplish, such as moving more off the shelves than the 360 or Wii and securing blu-ray as the fomat of choice. And while yes, blu-ray is currently out performing HD-DVD, its not doing well enough to counter the fact that Nintendo is creaming it. Im in Australia and if I had to choose between buying a Wii or a PS3, theres easily 700 or so good reasons why I would get a Wii over a PS3, and most all of them come straight from my wallet


Every race has a start, a middle and an end. One should not suggest that by being behind in the start of the race one will not be ahead by its completion.

The PS3 – when made slightly cheaper (say 30%) and with compatibility issues out of the way – they will fix it – if its costing them, and when blue ray hits video shops – we will see the PS3 enter its own.

I think it will still be the winner. Time will tell

Nich Starling

David, you are forgettint that nintendo and Xbox xould ahve sold out three or four times what they sold at laucnh, they simply did not have the stocks. You still cannot but a Wii off the shelf in any shop in Norwich where I live.

The PS3 may have outsolf the wii at launch, but what about last weekend ? How come Wii is outselling PS3 in japan by 2-1 ?


I think some people are forgetting something here… In its first few days of the UK launch the PS3 sold more consoles than both the wii and the xbox 360. The numbers were as follows:

PS3- 165,000 (75% of its launch stock)

Wii- 105,000, AND that was at christmas time.

Xbox360- 70,000


Shakir’s post is exactly the sort of reason I’m not going to buy a PS3 for a while – Sony fanatics, who label everyone who doesn’t agreen with them a ‘fanboy’ and come up with irrelavant or incorrect arguments. (Yeah gudging by sales.. Sony really have the best strategy all sown up; And what does ‘distrubuted network ready’ mean to gaming?). They’re just alienate anyone who doesn’t agree with their views and IMHO, they’re half the reason why the PS3 is don’t so bad.

Once the PS3 just gets some killer exclusives and it’s fandom stops being jerks, I’ll be in line.


The PlayStation 3 (don’t forget the uppercase “S” James!) will be fine. It’s way too early to gauge its success or failure. People are forgetting that the system still has many exclusives coming out down the line (most notably Final Fantasy and Metal Gear Solid).

Another reason KK was “booted upstairs” was because of the wacky stuff he said. This is the man that said people will work harder so they can afford a PS3, after all. A lot of the negative image Sony picked up over the last year started with him.

I’m sure people will remember Ken as a visionary that brought gaming to the masses. A few years (okay, maybe ten) will be enough to forgive and forget. It’s kind of like how people forgave Gunpei Yokoi for the Virtual Boy and remember all the other innovative things he did for Nintendo.

A non

In my opinion the PS3 is failing mainly failing due to cost and trust.

I think the fact that it arrived a lot later than the xbox360 is pretty irrellivent and lets face it, if the ps2 came after the xbox it would still have postioned where it is now.

The ps3 is hugely more expensive than xbox360, sony again have gone their own way with blue ray rather than hd (remember betamax, minidisk, atrac etc) and with the recent customer betrayal of the root-kit fiasco and the recent publicised patents allowing them to restrict a piece of software to 1 console, meaning if your console breaks so does all your games its no wonder why a lot of people are heading down the xbox360 route.

Its a shame when the pure brilliance of Sony is marred by their fanatical content ownership approach which lets face it only really affects their customer who do buy their products.

I have always been a huge Sony fan and never even felt ripped off by paying premiums for having their technology early on, I think the PS3 is awsome, but unfortunately cannot bring myself to trust sony enough to actually go and buy their product. If your considering a PS3 just google ‘Sony rootkit’ and decide if you would trust them with your data?

Shakir Razak

Nich -Sony are playing from exactly the same game-book as they did with the ps2, with added VHS-lessons.

Gamers and analysts have repeatedly slagged off their marketing,spec.’s, etc., and every time/generation they’ve been proven wrong => The only difference this time is expectation and a few hiccups -no doubt in part due to playing at other people’s timetables (xbox-death, and blu-ray components).

Kind regards,

Shakir Razak

Nich Starling

The problem was Sony’s obsession with trying to make people jump forward in two technological steps when they were/are not prepared to do so.

In trying to get us to but the PS3, they have to convince us that the PS2 is no longer viable and we need to “move forward”. This would be fine were it not for the fact that many people have already taken that step by going for the XBox 360.

So then, realising they have to get ahead of Xbox, they go for a second leap forward by going for blu-ray. The problem here is though that they have to convince us not only to move forward in gaming systems but also to accept that there is a need to replace our DVD players, which at the moment, there is no great rush to do. Yes, in 18 months time people might want HD, but at the moment, most people do not even own HD ready TV’s, so what is the point in an HD DVD ?

So Sony have, as we say in the UK, made a balls up by pricing the PS3 so high as well. I might have been a PS3 buyer had I not bought an Xbox in late 2005 and my Wii in late 2006. Why do I need a PS3 ?


I have to agree with most of the comments here; The PS3 cannot be called a failure yet, hell none of the consoles can be, they have hardly lifed out half their life span yet and people are calling them failures, christ!

As for me, well im a uni student with a PS2 and a nice PC that runs what i want it to games wise (WoW, Oblivion, Fable, SpellCraft etc). My PS2 is still used a fiar bit, normally when i want something different to play. However, looking at all the consoles at the moment, there is not one that really captures me. Out of al of them i would have to go for the Wii becuase it is so different, but then again i wouldnt class it as like the 360 or PS3 either.

In the end itll come down to what games are out in the next 24 months. Personally im hoping that MGS4 and FXIII are not a load of re-gurgetated drivel, because otherwise theres no way im buying a PS3

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