Kutaragi, Ken 1950–

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Ken Kutaragi
1950–

Chief executive officer and president, Sony Computer Entertainment

Nationality: Japanese.

Born: August 2, 1950, in Tokyo, Japan.

Education: Denki Tsushin University, degree in electrical engineering, 1975.

Family: Son of the owners of family printing business (names unknown).

Career: Sony Corporation, 1975–1991, researcher; 1991–1993, manager of PlayStation Project and Video Disc Player Group; Sony Computer Entertainment, 1993–1999, director and general manager of R&D; 1996–1997, executive vice president of R&D; 1997–1999, executive vice president and co-COO; 1997–, chairman and CEO of American operations; 1999–2001, executive president; 1999–, CEO and president; Sony Corporation, 2003–, executive deputy president for Game Business Group and Broadband Network Company.

Awards: Best Managers, BusinessWeek, 2002.

Address: Sony Computer Entertainment, 2-6-21, Minami-Aoyama, Minato-ku, Tokyo, 107-0062 Japan; http://www.scei.co.jp.

■ Ken Kutaragi was an engineer at Sony when he created the PlayStation video-game console and pushed the company to build it. Once dismissed by Sony executives as a mere toy, PlayStation became Sony's cash cow, contributing 60 percent of the company's operating profits in 2003. Kutaragi was rewarded for PlayStation's success with the presidency of Sony Computer Entertainment (SCE) and a seat on Sony's corporate board. A business visionary who combined technical and marketing expertise, he was described as brash and outspoken and was considered a maverick among more traditional Japanese executives. As of 2004 he was widely regarded as a potential successor to the Sony Chairman Nobuyuki Idei.

CREATIVE ENGINEER

Growing up in Tokyo, Ken Kutaragi was a straight-A student who worked after school in his family's printing business and enjoyed tinkering, building things like amplifiers and gocarts. After earning an engineering degree, he joined Sony because, as he told BusinessWeek, "it was the best in terms of encouraging creativity and offering researchers freedom" (June 14, 1999). He worked on a variety of cutting-edge projects, including an early liquid-crystal display screen and a disk-storage camera.

THE TOY THAT SAVED SONY

In 1989 Sony gave the go-ahead to a project Kutaragi had proposed: a joint venture with Nintendo to develop a next-generation game console with superior sound and graphics capabilities. After Nintendo pulled out of the partnership in 1991, Kutaragi convinced Sony to continue, reportedly threatening to quit if the project was canceled. The acuity of his judgment was confirmed when the PlayStation, introduced in 1994, met with immediate success, rapidly becoming the bestselling game console on the market. Over the next six years the proportion of Sony's revenue that came from PlayStation sales steadily increased, as did Kutaragi's influence within the company. In 1999 he was named president and CEO of Sony Computer Entertainment, the subsidiary responsible for the PlayStation.

PlayStation 2, introduced in 2000, was similarly successful, selling 40 million units in the first 30 months and confirming Kutaragi's significance to Sony. BusinessWeek called him "Sony's indispensable samurai" (March 20, 2000). Kutaragi, with typical disregard for Japanese-style deference, told CNN that Sony Computer Entertainment was "the driver for the rest of the company" and "the clear leading power for the network, for the next generation" (September 2000). In October 2000 Sony gave Kutaragi a seat on the parent company's board.

THE NEXT BIG THING?

As the 21st century began, Sony's dominance of the home electronics industry was waning, and hardware margins were shrinking thanks to pressure from low-cost producers in Korea and Taiwan. In 2003 Sony initiated Transformation 60, a plan to restore both the company's bottom line and its reputation as an innovator by its 60th anniversary in 2006. Sony reorganized into seven business entities: four Network Companies (Home, Broadband, IT and Mobile Solutions, and Micro Systems) and three Business Groups (Game, Entertainment, and Personal Solutions), and announced plans to lay off 20,000 workers, or 17 percent of worldwide staff. While Sony Corporation president Kunitake Ando spearheaded efforts to cut billions in expenses and improve operating margins, Ken Kutaragi was placed in charge of developing the next generation of products. In April 2003 Kutaragi was named executive deputy president in charge of the Game Business Group and the Broadband Network Company.

Kutaragi's plan was to use the PlayStation to introduce customers to a broadband environment where a Sony console would deliver games, music, online shopping, and interactive services. He announced plans to produce the PlayStation Portable, or PSP, a handheld gaming system designed to compete with Nintendo's market-leading Game Boy. Though Kutaragi called it "the Walkman of the 21st century," its release was delayed from the 2004 holiday season until 2005. In a joint venture Sony partnered with Toshiba Corporation and IBM to develop CELL, a high-powered chip. Kutaragi described a vision of "digital convergence" that would put the CELL chip in a centralized, networked appliance, integrating entertainment hardware and software under the Sony brand.

The word most often used to describe Kutaragi was "brash." Kelly Flock, the CEO of Sony Online Entertainment, called him "the most animated and passionate person I've ever known" (Li, September 1, 2000). Sony was long considered unusually liberal and entrepreneurial by the conservative standards of corporate Japan, and Ken Kutaragi in particular was far more outspoken and open to innovation than traditional Japanese executives. As of 2004 he was well positioned to become Sony's next leader.

See also entry on Sony Corporation in International Directory of Company Histories.