Kutaragi booted downstairs at Sony

Analysis, please? Looks to me like they thought he was getting a little too big for his britches. I did think some of his recent public pronouncements were unuaually forward for a lifelong Japanese executive.

Wonder what this means for PS3…

I think Sony is looking farther down the road than PS3 and things like it. The hardware business is becoming a difficult business to make any money from. Home electronics prices are always falling, sometimes so fast that margins end up very slim even on what you might think is a luxury item. That means the electronics makers like Sony end up with no profits.

The real money is in software and content. By appointing a guy to head the company that’s a content man, it shows clearly what Sony will be focusing on in the future. They’re going to move away from consumer electronics and maybe even the semiconductor business as it drains tons of money yet ends up in loss-leader products like PSP where they’re selling below cost. Without a lot more content providers in house, the incoming funds can’t offset those hardware costs. Sony is in a precarious spot at the moment because their PS2 hardware sales have been very good but if they fail in any generation, the rest of the company is doing mediocre to poor. Playstation is their profit center because of its success.

Without going into too long a post, I think this clearly puts the focus on content at Sony. They’ll continue to produce hardware, but I think it’s going to start becoming less important to them as a core business over time. They’ll invest in more content producers and internal studios in music, movies and games.

–Dave

I expect responding to the PSP square button complaints with “We have made the most beautiful thing in the world, please don’t criticize it” didn’t help him much, either.

Yeah, I agree. I just posted a massive screed over at GAF about this. Some of those guys are much more knowledgeable about internal Sony politics than I am, but I think the bottom line is that this signals a shift for Sony. They tried to rebuild the electronics business and it didn’t happen and may never happen so they’ll try harder to drive everything with content now.

–Dave

If I were a guessing man, I’d say something bad is about to become revealed at Sony. Like cooked books, or their LCD monitors cause cancer or the PS3 is vaporware. The head honchos are ducking for cover and setting up the fall guys. Then they’ll retake control when the dust settles.

K

PS3 is vaporware

Based solely on the timing of the upheaval, wouldn’t this be the logical conclusion? Not that it’s actually vaporware, but that something is very wrong? Maybe it won’t make E3, or perhaps the whole cell gamble is not really panning out.

It’s definately weird timing, that’s for sure. You’d think that guy who’s been responsible for Sony’s biggest source of revenue for years would be an obvious choice to take over the company; losing his postion on the board is even more of a shock. Either he lost a power struggle or his stock was seriously damaged by some failure that he’s being held responsible for. Of course, it could be something as simple as mis-judging Microsoft as a competitor. I do know that the PS2 is not as profitable at this point in it’s lifecycle as the PS one was. Maybe he’s been hurt by Sony not being prepared to launch the PS3 to compete with MS on the XBox 2 this fall.

Or maybe the eve of the most important launch in company history was seen as a bad time to saddle its architect with an assload of new, divergent responsibilities? Who knows.

It’s pretty much a given that the PS3 will only be there in the form of tech demos, and even then I’d expect they’ll only be closed door stuff.

It may really be something as simple as freeing him up from administrative responsibilities so he can focus on the PS3 blitz that’s on the way. It will probably demand a lot of his attention, since this gen seems like more of a coin toss than the last three.

I think it most likely that the cell processor’s power increased exponentially beyond the lab predictions, and he ignored the warnings against hooking up more than three at once, and over Sony’s LAN, to boot. The linked PS3s became self-aware and engineered a corporate coup, that Sony’s in a desperate battle to hide from shareholders while the MCP crafts its manifesto prior to exercising global dominion.