Analysts believe Sony's Kutaragi was squeezed out

by Ludwig Kietzmann { Apr 27th 2007 at 12:46PM }

It's hard not to imagine industry analysts getting along famously with PlayStation father, Ken Kutaragi. Holding hands, dancing in a circle and spouting outrageous claims at each other, they'd have a jolly good session of prediction, scrutiny and hopscotch. In response to Mr. Kutaragi's recently announced plans to leave the circle, several analysts have expressed belief that his departure is partly motivated by the parent company yelling from the outskirts of the park, insisting that, "You've had your fun, it's time to go." According to a GameDaily BIZ report, the PlayStation 3 may make for a particularly heavy golden hand to shake.

Evan Wilson of Pacific Crest Securities tells Bloomberg.com that Kutaragi's retirement "is likely an indication Sony corporate isn't satisfied with the initial success of the PS3." The Washington Post calls it a "face-saving firing," quoting IDC's famous time traveling analyst, Billy Pidgeon, as saying, "Sony had too much hype and not enough delivery." Furthermore, an AG Edwards analyst, Bill Kreher, tells GameDaily BIZ, "The PS3 obviously has had a rough start and I would question whether Kutaragi would still be leaving if the console had been better received by the marketplace."

Still, some analysts agree with Sony's official line that Kutaragi had left of his own accord in pursuit of "new challenges beyond the world of PlayStation." Michael Pachter of Wedbush Morgan Securities states that the decision likely had more to do with software and the PSP. "It can't be [Kutaragi's] fault that the cost of the box was so high, and I have a tough time believing he insisted on Blu-ray. They probably just all agreed it was time to move on." He and a few other analysts go on to note that Kaz Hirai will prove to be an effective leader and a better instigator of success in the years to come.

Tags: Analysts, Ken Kutaragi, KenKutaragi, Kutaragi, Sony

Reader Comments (Page 1 of 1)

JodyAnthony @ Apr 27th 2007 12:51PM

hahaha, that picture is creepy as hell

REUYL @ Apr 27th 2007 12:52PM

That's some 1337h4x photoshop skills you got thar.

Raikage @ Apr 27th 2007 12:59PM

Poor guy. Just because he did something wrong doesn't mean that he should be punished this way. If you think about it he got the people who are "terminating" him jobs. He did many great things for the industry, we should look at those, not his failures.

AceMilo @ Apr 27th 2007 1:07PM

"Poor guy. Just because he did something wrong doesn't mean that he should be punished this way. If you think about it he got the people who are "terminating" him jobs. He did many great things for the industry, we should look at those, not his failures."

Possibly, but Japan functions differently. If a product fails, according to Japanese culture the person responsible for that product also fails and must quit. It doesn't matter if he made the decisions that made it fail, if it fails, he fails, period. The only reason the ps1 and ps2 were run away successes were because they had no good competetion. The dreamcast was on its way out by the time the ps2 came out (shame since dc was better), and the n64 was too expensive compared to the ps1. The 360 already had an installed userbase and a great library of games by the time the ps3 came out and the wii was just too popular, it had no chance.

baby sea tuna @ Apr 27th 2007 1:09PM

He got off easy. If this had been feudal Japan, he'd probably have had to commit seppuku.

synce @ Apr 27th 2007 1:10PM

The same thing happened to Sakaguchi. One huge flop is all it takes (in his case it was Final Fantasy: The Spirits Within--nearly bankrupt Square).

I hope Sony leaves the console market soon. Then there can only be Nintendo and Microsoft, two entirely different experiences, and I don't have to worry about copycat Sony getting a few good exclusives.

Stabface Pro @ Apr 27th 2007 1:13PM

Lol the toothpaste shouldve been blew to simbolize the bluray player rofl

Konny @ Apr 27th 2007 1:14PM

@4,5,6 ... does not add up.. lets se... N64 = huge flop, GC = huge flop .. but, those guys are still around. Shiggy was responsible for the N64 cartridges, which led to the downfall of nintendo in the console arena.

Todd @ Apr 27th 2007 1:16PM

That picture is... disturbing... and minty fresh!

Meloche @ Apr 27th 2007 1:19PM

@Konny, maybe the GC was considered a big flop, but Nintendo made lots of $$$ with it (I don't know about the N64)

Szu @ Apr 27th 2007 1:21PM

@8

While the N64 and GC were flops, they were profitable flops, because Nintendo made some choices down the line to curb production and save money on costs. In Nintendo's eyes, they were not giant failures.

As for the PS3, it's not a giant failure yet, but it sure isn't anywhere near profitable. Sony has to be bleeding money left and right. And Krazy Ken had a big hand in it.

synce @ Apr 27th 2007 1:22PM

No, the PS3 isn't a flop N64-wise. It's beyond that. From what I've heard Sony is betting a LOT on the PS3 and Blu-ray. A lot as in most of their money. And worse yet, I've heard that Wal-Mart has declared HD-DVD the winner of the format war. Apparently they're soon going to ignore Blu-ray since the players are too expensive for their customers and are actually going to stock some sub-$199 HD-DVD players this year. So yeah, I'd say Kutaragi isn't going to stick around much longer.

Todd @ Apr 27th 2007 1:28PM

Well, the Porn industry has also endorsed HD-DVD... especially since Sony has somewhat alienated them in allowing porn on Blu-Ray. This is clearly what happened originally with VHS and Beta, when Sony prevented the Porn industry again from using Beta.

John @ Apr 27th 2007 1:34PM

http://www.gamesindustry.biz/content_page.php?aid=24619

Not very related but sorta

Game are refusing to stock oblivion for the ps3 in the uk and ireland

lol

Jack of No Trades @ Apr 27th 2007 1:35PM

Check out Sony's Financial Reports.

http://www.sony.net/SonyInfo/IR/financial/ar/2006/qfhh7c00000akslc-att/qfhh7c00000aksmr.pdf

They sure in the hell are doing better than what you think. Even if PS3 bombs they still will be in gaming town next gen.

Phranctoast @ Apr 27th 2007 1:37PM

post 12 and 13.

you guys really need to read more.

12. This has been disputed and proven false on the avs message boards, and they are big hddvd fanboys.

13. Debbie does dallas (again) is coming out on blu ray on May 1st. ony never alienated them. They just didnt go out of their way and make room for all the porno studios to use the equipment that real movie studios needed and were in short supply.

OhJustSomeRandomGuy @ Apr 27th 2007 1:50PM

Man, being an analyst is a sweet job.

Find the obvious story, and rush to get your name attached to the predicting of it so people will think you're smart.

It's like being a post whore in the business world.

Todd @ Apr 27th 2007 1:51PM

@Phranctoast

Actually, this is what happened. Seems as if Sony was, at first anyways, unwilling to coorperate.

Adult legend Joone, co-founder of porn distributor Digital Playground, said that his company was forced to change HD allegiances for the company's planned first high-def titles after "all Blu-ray Disc copying facilities in the United States had refused to cooperate." He went on to allege that primary Blu-ray backer Sony "wants me to publish my films on HD DVD."

Followed by the article: http://www.highdefdigest.com/news/show/433

So thank you... I can read just fine.

freelancer @ Apr 27th 2007 1:56PM

Whether it was his idea or not placing blu-ray into the PS3 caused its lukewarm reception. Its likely 150-200 dollars cheaper without it. If they had launched at $350 think how many would have gott off the fence right now and bought one. He had a good run and he may not be finished in the industry yet but, someone had to take the blame and you may as well start at the top.

Todd @ Apr 27th 2007 1:56PM

Bleh... why release that porn as the first Blu-Ray when there are countless others available.

JodyAnthony @ Apr 27th 2007 2:00PM

who in the world buys their porn on physical media anymore?

Todd @ Apr 27th 2007 2:11PM

@JodyAnthony

Heh... good point.

C. Grant @ Apr 27th 2007 2:14PM

Porn will absolutely not decide this format war. If consumers are more than willing to gobble up low res videos on the internet, then they've already proven that the resolution enhancement that HD affords is not a key seller (see MP3s and Super Audio CDs). Additionally, internet porn sales are staggering -- sales will continue to grow on the internet and DVD and niche-hd adoption will be just fine in physical media. Also, who wants to watch porn in HD?

Phranctoast @ Apr 27th 2007 2:25PM

OK.
Todd. Like you said...."At first" they were uncoopererative. You also posted an article from Jan 11th.

There are alot of other movies im sure are better then the remake of debbie does dallas, but hey..i dont make those decisions.

Phranctoast @ Apr 27th 2007 2:28PM

And btw ......not being a dick with the comment about reading. I just get annoyed seeing people recirculate misleading or debunked news.

Fatass of Kickassness @ Apr 27th 2007 2:41PM

That picture made me laugh out loud. I didn't even know what it was until I looked at it more carefully.

EMaster @ Apr 27th 2007 2:59PM

I do also believe he was squeezed out. The Japanese and their "honor" system definitely amounts up to this. The only reason he was probably not fired was because of the PS 1 and 2.

losttoys @ Apr 27th 2007 3:13PM

It is not surprising that this has occurred, as Sir Howard Stringer himself was not happy with the performance of Kuraragi, even going as far as calling him a renegade who refused to talk to his superiors (http://www.gwn.com/news/story.php/id/11544/PS3_Development_Kutaragis_Big_Secret.html)

Todd -

Sony, not the Blu-Ray Disc Association (BDA), refused to print the pornography. Sony is not the only company, however, who presses BD media. Philips, Panasonic, and several other firms own operate manufacturing facilities. None of these firms denied the duplication rights of BD, especially since the BDA fully supports pornography.

losttoys @ Apr 27th 2007 3:16PM

Todd -

Further reading for you: (http://arstechnica.com/news.ars/post/20070112-8602.html)

"Ars contacted the Blu-ray Disc Association for comment on Joone's allegations. "There is not a prohibition against adult content," said Marty Gordon, vicechair of the BDA US Promotions Committee and vice president of the Philips Electronics Hollywood Office. "The BDA welcomes the participation of all companies interested in using and supporting the format, particularly those from the content industry. We look forward to working with any content providers interested in providing their audience with [the] best possible high definition home entertainment experience.""

sheppy @ Apr 27th 2007 4:27PM

"Possibly, but Japan functions differently. If a product fails, according to Japanese culture the person responsible for that product also fails and must quit. It doesn't matter if he made the decisions that made it fail, if it fails, he fails, period. The only reason the ps1 and ps2 were run away successes were because they had no good competetion. The dreamcast was on its way out by the time the ps2 came out (shame since dc was better), and the n64 was too expensive compared to the ps1. The 360 already had an installed userbase and a great library of games by the time the ps3 came out and the wii was just too popular, it had no chance."

I love how people think Playstation became as large as it was simply by chance. This, in essence, is moronic thinking. But fine, let me go ahead and break through the various stages of Playstations life and how it got to be so huge.

1. Sony, having finally thrown together a working drive, began shopping it around to various third parties that were already interested in the storage space provided by the media. Among the many companies that were hyped about it was Squaresoft, who was already looking at the hefty price tags needed to continue the Final Fantasy series (people tend to forget, because of cartridge size, Chrono Trigger carried an MSRP of $85). The storage media alone got several high name companies interested.

2. Nintendo betrays Sony for Philips but several companies still like the Playstation hardware. When Ken began telling companies it may come out as it's own console, several companies perked their ears up and began to take true notice. PSX was pumping the 3D aspect of gaming.

3. The Saturn, primarily still in final specing stage, begins to notice the next wave is 3D and haphazardly adds 3D hardware to the Saturn. Spec wise, Saturn cannot compare to PSXs 3D abilities, but trumps the console in 2D performance. Pay attention to this part, it is important.

4. Sony begins development of their own games as well as begins sending out dev kits to interested parties. This next part is where they really shook up the industry. They began sending out their programmers and designers to third parties to help them come to grips with the new hardware. Likewise, they began forming a developer community were common tactics or even special tricks, when discovered, was shared amongst this community. Previously, the hardware developers attitude in this regard has been "fuck you, we're busy working on Sonic CD/Yoshi's Island." This was how Sony got so many developers on their side.

5. Saturn launches in Japan and due to the strong presence of 2D, is a success. Doubts begin to circle about Playstations chances, especially as Ultra 64 began becoming less of a buzzword, more of Arcade hardware "to be released later as a console." Meanwhile, Sega, due to their traditional "we have no fucking clue what we're doing" tactics in the US, not only give their branch less than two months notice Saturn is coming, but also came fresh off two more disappointing hardware launches in the 32X and CDX. Saturn launches for the unheard of $400 price tag, and preceeds to get WTF responses as we are all invited to the Theatre Of The Eye. In other words, it flops but in Japan, the opposite is true.

6. As Playstation ramps up campaigns, Namco throws two of their biggest guns at the cause. Ridge Racer and Tekken lead the Playstation charge. Sony continues development of their own games even giving a chance to a then unknown David Jaffe and his concept of "vehicular combat." In Japan, Playstation and Saturn butt heads in a month to month battle so fierce, it makes the 16 bit war look like Atari vs. Intellivision. This war would splinter the Japanese market in ways no other console war ever did. Playstation finally obtains it's first lead when FFVII is announced as an exclusive to the console. A lead which Saturn could never recover but all the way until the launch of Dreamcast, Saturn had a devout following.

7. The playstation brand begins to market games as being cool to those past Nickelodeon watching phases of their life. With the help of cryptic ads, more and more people were ennamored by the Playstation. Suddenly, the console hit and was an immediate success for several reasons and even, for the first time ever, made a console launch an actual event. However, it wasn't out of the woods yet as there was still the looming shadow of a plumber.

8. Ultra 64 became the Nintendo 64. And it launched to great numbers. Nintendo couldn't keep up with demand and things began to look grim for the Playstation. More and more game delays, high costs of games, and many more issues began to weigh down the N64 and by the middle of it's second year, Sony held a huge advantage in price, developer support, game library, and the common word for gaming as "Nintendo" was turning into "Playstation."

So, in essence, a lot of really hard work went into the Playstation brand. Claiming it won because of lack of competition is insulting to the industry at large.

Mr Khan @ Apr 27th 2007 4:31PM

@ Meloche

I think you're looking at the consoles in hindsight

at the time, N64 was pretty big, not nearly as so as the PlayStation, but pretty big. It failed to compete, not as a standalone (say, if it had no competition). Virtual Boy, THAT failed as a standalone. Its the same with GameCube, lots of people had it and loved what it offered

If the PS3 fails, it'll be on the level of the N64 and GC, it'll fail to compete, but those who own it will usually be happy with it

No, i believe Kutaragi was forced out because of all the embarrassing statements he made, although Hirai also participated in this, too. But Kutaragi's really stood out

I mean, that's why we called him "Krazy," right?

Mr Khan @ Apr 27th 2007 4:39PM

@ sheppy

I would say what put PlayStation ahead of Saturn was hardware simplicity (thus being more attractive to 3rd parties)

It was that un-emulatable multi-core clusterfuck that turned developers off, but i think the Saturn had more raw power than PSX, but PSX had a far more effecient processor (like comparing GC to Xbox)

The success of the PlayStation brand was due to Kutaragi making the original very versitile and accessible. The second was the same way, although it was not altogether accessible, it trumped Dreamcast because of DVD, trumped Xbox through its more effecient CPU and Japanese support, and trumped GameCube because it actually used its modem and had American support