Sony PlayStation 'Father' Steps Down

TOKYO – The chief architect of Sony's PlayStation game console stepped down on Tuesday as the Japanese company struggles to defend its dominance in the video game industry and revive its reputation as an electronics pioneer.

Ken Kutaragi, 56, stepped down as Sony Computer Entertainment Inc.'s chairman and group chief executive, the gaming unit said Tuesday. The unit is now headed by Kazuo Hirai, SCE's former president and chief operating officer.

The departure of Kutaragi, an icon among gamers, marks the end of an era at Sony Corp. that saw the company long dominate the video game industry with its flagship PlayStation consoles.

But it also highlights troubles at Sony (SNE) amid a series of blunders over the rollout of its latest PlayStation 3 and intense competition from Nintendo Co.'s popular Wii console and Microsoft's (MSFT) Xbox 360.

Kutaragi's most recent brainchild, the PlayStation 3, has been marred by embarrassing production shortages and a $600 price tag that some fans said was too steep, forcing Sony to give away free games and other marketing gimmicks to spur sales.

Sony has also struggled to expand beyond the young, male demographic of "hardcore" gamers -- unlike the Wii, which has actively targeted women, young children and older gamers. Sony's market share has shrunk as a result.

Tokyo-based Sony shipped 5.5 million PS3 machines in the fiscal year through March 31, fewer than the 6 million the company had targeted. Nintendo shipped 5.84 million Wii consoles worldwide during the same period.

The PS3's hefty startup costs have weighed heavily on the company's fight to drive up profit in its core electronics division. Sony is not expecting to post a profit in its game business until the fiscal year ending March 2009.

The flop has added to the woes facing the maker of the iconic Walkman, which has also ceded its leadership in portable music players to Apple Inc.'s (AAPL) iPod.