Sony's New CEO Sees a Tough Road Ahead
Kazuo Hirai, who takes over as President and CEO of Sony Corp. in April, believes the company needs to set aside previous tradition and focus on the new "user experience" in order to succeed.
As reported earlier this week, Sony's current Executive Deputy President and Chairman of its Computer Entertainment (SCE) arm, 51-year-old Kazuo Hirai, will serve as President and CEO of Sony Corporation starting April 1. He now admits that taking the reigns of Sony is a much tougher, bigger challenge than when he took the reigns of SCE back in 2006.
"I thought turning around the PlayStation business was going to be the toughest challenge of my career, but I guess not," he told the Wall Street Journal in an interview. "It's one issue after another. I feel like 'Holy s—, now what?'"
He said the company will be in serious trouble if it doesn't make adjustments, if it doesn't set aside past successes in manufacturing and focus on the user experience itself. That means shaking up the corporate structure which he blames as the reason behind the lack of product innovation and for keeping with prior tradition. That also means cutting costs like he did with the PlayStation business four years after Sony reported a horrid multi-billion loss.
"Sony cannot continue walking on the same path,” Hirai said on Thursday. "Sony needs to find new business areas, such as medical. We also need to select and narrow our business portfolio." He added that the key questions for hardware in production at Sony should be "What can you do with the product? What are your services? What kind of content do you have?"
"It’s not just about the hardware product, it’s about the user experience," he said.
Hirai joined the company back in 1984 by signing on with Sony Music. In 1995, he was assigned to run SCE America (or SCEA) where he played a vital role in the original PlayStation console's success. Then in 2006 he replaced Ken Kutaragi as SCE President with orders to restore profits after Kutaragi revealed that the PlayStation 3 would lose more than $2 billion in its first year.
One of the changes Hirai plans to make will be the way Sony itself develops products. Previously different business groups mapped out products independently -- a method Hirai said lead to a bloated and disjointed portfolio. "We're going to tell you what you are going to make—not the other way around," Hirai said. "This is a complete sea change."
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On Thursday Sony said it expects to make a loss of $2.9 billion in the year ending March 31. That's more than double its previous estimate. Yet Sony shares rose as much as 8.9-percent in Tokyo trading, the biggest daily gain since 2009.
To read the full interview, head here.
Kevin Parrish has over a decade of experience as a writer, editor, and product tester. His work focused on computer hardware, networking equipment, smartphones, tablets, gaming consoles, and other internet-connected devices. His work has appeared in Tom's Hardware, Tom's Guide, Maximum PC, Digital Trends, Android Authority, How-To Geek, Lifewire, and others.
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alidan damn... i can see why there wont be a ps4 if that rumor was even true to begin with... they if they put something out, it would need to make profit, and that kind of a console wouldn't much more powerful than the ps3...Reply
i can now see them seriously sticking to a 10 year plan now. -
alidan o and how about this for a focus...Reply
pc monitors and small tvs, all made in oled
the monitors would be 1920x1200 and 2560x1600 they would be 24in and 30in respectively. and sell them at break even prices, as in they cover operation costs, and all that crap, but dont add to the profit.
make them high quality, and become known for having the (pronounced theeeee) monitor to have... you than take the success from those, and introduce a new model, better picture and such, but marked up a bit for profit, and more the same manufacturing process over to the 40in+ line of tv.
gain a reputation for immaculate hardware now, because most people who got a big tv when they got cheap (50in for less than 1500$) are now looking into getting a new one, and you will have a built in user base ready to buy.
hard to say where you go from there though. -
TheFoxyBox alidandamn... i can see why there wont be a ps4 if that rumor was even true to begin with... they if they put something out, it would need to make profit, and that kind of a console wouldn't much more powerful than the ps3...i can now see them seriously sticking to a 10 year plan now.Reply
Of course there will be a PS4 and what's all this shenanigans about it only being profitable with limited hardware? If I'm not mistaken putting Blu-Ray in the PS3 is what made Sony lose a money since it was fairly new and expensive. Now look you can getting a GPU that's way better than one when the PS3 was released for the same cost. So of course the PS4 will be a lot more powerful than PS3 and still make Sony money.
Now I really like that Sony is making this move and I'm interested to see what comes from them in the future. -
applegetsmelaid Sir Howard Stringer has some big shoes to fill.... Kaz just doesn't seem to have that CEO persona.Reply -
pedro_mann "It's one issue after another. I feel like 'Holy s—, now what?'"Reply
I have a little bit more respect for the new CEO after reading this quote. Makes me feel like he is more of a real person than a stuffy big wig corporate type. We'll see. As for Sony, they have a very good brand image, so that will help with their situation, if execution can be streamlined. Unfortunately, this looks like layoffs in order to reduce redundancy, etc. -
shloader It wasn't just the Blu-Ray drive but the Cell processor that went with it along with the RamBus licensed tech. It all combined to make the unit too damn expensive. Certainly not knocking Blu-Ray as it seems necessary with some games now (like any title that's cross-platform but multi-disc on 360) but looking back they could have pushed a design out two years earlier with more conventional hardware... possibly. The Wii has proven you don't need the ultimate in latest tech, but staying power comes from avoiding being a gimmick.Reply -
choujij I guess spending tens of thousands of dollars in lawyer fees trying to sue the pants off of a couple of teenagers, wasn't the best way for the company to earn profit after all.Reply -
robochump How times change. No wonder Apple decided not to buy Sony. PS3 was a disaster which is very sad since it is one of the only innovative products to come out of Sony for some time.Reply -
SmileyTPB1 It's been pretty obvious for years that Sony has lost sight of what the consumer wants. I wonder why it wasn't obvious to Sony.Reply
The PS3 blunders alone were very obvious. They were that last one out by a year, they most expensive console on the market and the hardware cost so much they were still loosing their ass on every unit.
At least he doesn't blame piracy for Sony's problems. -
p05esto Sony made a dire mistake of going after the hacker community. They didn't realize how closely aligned the "hackers" are with gamers and tech users in general. Most knowledgable computer users and hard core gamers also consider themselves hackers to some extent. Hacking isn't illegal, it isn't a bad thing most of the time, hacking is tinkering, changing, exploring and creatively making things better. Sony shot itself in the foot by going after the hackers, shooting one of them was like shooting their entire audience. Idiots.Reply