Musical chairs: Why Sony’s exec shuffle matters to gamers

By Rob Fahey, Thursday, 30 June 2011 14:11 GMT

House takes over at SCE, Hirai becomes chairman and Kutaragi edges closer to the door – but what does it all mean for gamers? Rob Fahey answers the question.

Andrew House

Welshman Andrew House, 45, was promoted from President of SCEE this week to President and Group CEO at SCEI, the role previously held by longstanding PlayStation frontman, Kaz Hirai. He joined Sony in 1990.

Surrounded by so many technological distractions, it’s easy to forget the simpler pleasures of yesteryear – the games which held our attention long before we knew what a polygon was. There’s one ancient game, though, which the digital entertainment purveyors at Sony seem to remember well – musical chairs.

It’s only a couple of years since Andrew House took over at Sony Computer Entertainment Europe, and now he’s jetting off to a new seat in Japan – heading up the whole PlayStation business as president and CEO. That’s a chair that’ll still be warm when he first sits in it, since it’ll have been vacated moments earlier by Kaz Hirai – who’s shuffled through most of the top jobs in SCE in the past few years, and is now headed for the Chairman’s role.

When the music stops this time, there’ll be a few people left standing. Present chairman Akira Sato is retiring from the group, although he’s never been a hugely recognisable name anyway – he’s always been overshadowed by bigger personalities like Hirai and, of course, Ken Kutaragi, another man who’ll no longer have a comfy chair at Sony after this reshuffle. Kutaragi, the “Father of PlayStation,” was essentially ousted from SCE back in 2007, but he’s held on to a somewhat meaningless “Honorary Chairman” role ever since. Now that’s gone as well, and Kutaragi is relegated to a “technology advisory role”.

What does it all mean? Is it just a reshuffling of titles, the product of some arcane internal politics at the giant Japanese firm, or can we read something about the future of Sony and PlayStation into these appointments? Does this just mean that Kaz Hirai gets a parking space a bit closer to the front door, or should gamers actually care?

A few commentators have tried to link the reshuffle to the recent PSN fiasco, and it’s easy to see how that’s a tempting conclusion. Hirai, in particular, has been in the firing line over the PSN security failures – failures which this week led to an embarrassing (but easily defeated) call for the resignation of Sony boss Sir Howard Stringer at the company’s shareholder meeting in Tokyo.

Yet this isn’t a conclusion that makes any sense. Certainly, it’s normal in Japanese business (and indeed in Japanese politics) for a senior executive to take the fall for a major public failure. That’s normally a pretty theatrical and stage-managed affair – there’s a press conference at which the fall-guy bows, scrapes and apologises a lot, with extra bonus points for actually getting on their knees in front of the audience and crying profusely. A few months to a year or two later, the same chap will quietly be shuffled back into a senior position, his career none the worse for wear.

That’s obviously not what’s happening at Sony. Nobody is being shuffled out or sent on gardening leave – this isn’t a consequence of what’s happened with PSN, and instead, it’s probably a move that’s been planned and discussed by SCE’s top management for at least a couple of years.

House’s party

There are two separate stories here. The first is about Andrew House, a 20-year Sony veteran who’s worked in a host of senior marketing positions across Japan and America – including being part of the team which coordinated the wildly successful marketing for the original PlayStation. Now that he’s going to be in charge of everything PlayStation, it seems obvious that his two-year stint as boss of SCEE was simply designed to add experience of Europe to his CV before shipping him back to Japan to run the whole division.

Kaz Hirai

Kazuo “Kaz” Hirai was born in Tokyo in 1960. He was yesterday promoted to Chairman of SCE. Current Chairman Akira Sato will retire from the role effective August 31. Hirai joined Sony Japan’s music division in 1984.

The second story is about Kaz Hirai, and in ways, it mirrors House’s story. He’s been with Sony for over 25 years, working in senior marketing roles in Japan and America – including a key role in establishing the PlayStation brand in America – before heading back to Japan to run the PlayStation business five years ago. Now Kaz has a new target in his sights – with the retirement of Sir Howard Stringer imminent (it’ll most likely happen in 2013, but perhaps as soon as 2012), he wants to be the next boss of Sony. Becoming chairman of SCE, a less hands-on role, gives him a chance to focus on that goal.

None of which, I guess, explains why gamers should care. There are a few reasons why this should be important to gamers, in fact, each of which tells us something about the future of the PlayStation and of Sony as a whole.

For a start, it looks like Sony Computer Entertainment is finally on track to fulfil what’s seemed to be its destiny for almost a decade, by getting one of its bosses promoted to head up the entirety of Sony Corporation. Ken Kutaragi was once thought to be a shoo-in for the job, but his golden boy image took a knock when the PlayStation Portable was eclipsed by Nintendo’s DS, and was irreparably damaged by the enormous cost and early slow sales of the PlayStation 3. Kutaragi’s tech-obsessed, engineering-led approach took much of the blame for the PS3’s troubles, and his abrasive public persona (remember him claiming that we’d all happily work second jobs to afford a PS3?) didn’t help either.

Instead, the torch passes to Hirai – a liberal arts graduate whose background is in marketing and management, not engineering, and a smooth-tongued public speaker (although the “Riiiiiiiiidge Raaacer!” soundbite will haunt him for the rest of his career, I suspect) with it. The antithesis to Kutaragi, in other words, but to some extent, Hirai is cut from the same cloth as Sir Howard Stringer, and is widely rumoured to be Sir Howard’s own choice of successor.

Also cut from the same cloth is Andrew House, of course – and it’s here that you start to see Sony’s real story emerging. It’s the same story that’s been emerging for the past five years, in many ways. It’s the defeat of the engineers, the gradual edging out of people with a background in hardware and the replacement of men who talk in terms of chipsets and clock speeds with men who talk in terms of demographics and audiences. Kaz Hirai’s replacement of Ken Kutaragi is just one aspect of this. The rise of Andrew House to replace him confirms that Hirai isn’t a blip – he’s brought his own people with him, and the engineers aren’t going to be given a chance to run the show again.

That sounds a little sad – we all love the idea of the guys who actually make stuff being able to run their own companies, after all. On the other hand, the Sony Computer Entertainment that’s emerging from all of this is probably a lot better for developers, and ultimately for gamers.

Kutaragi and his compatriots had a tendency to try to push the limits of hardware design, without really caring what developers wanted or needed, or considering what their rivals were doing. House and Hirai couldn’t care less about hardware – they just want it to serve a purpose, and that purpose is delivering a console that developers can write great software for and consumers can buy at an affordable price. The story of Sony over the past five years is that of a gradual and sometimes painful transition from the former kind of thinking to the latter. This week’s promotions are important to gamers, because they prove that the latter thinking has won out – and suggest that before long, SCE’s new management style will be in command of Sony as a whole.

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