Howard Stringer steps down, Sony looks to Kazuo Hirai to stop the bleeding

Sony will promote Kazuo Hirai to president and CEO in April, ending Sir Howard Stringer's six year reign as the company's chief executive. Hirai was Stringer's personal recommendation to succeed him, and Stringer will continue to serve in an executive capacity with the company as chairman of the board beginning in June 2012.

"Three years ago, I started to work with the Board on succession plans, and in February, 2009 we named a new generation of leaders to be my management team", Stringer says. "Among them was Kaz Hirai, who had distinguished himself through his work in the PlayStation® and networked entertainment businesses".

Hirai's promotion to CEO was widely expected among industry watchers considering the PlayStation business is one of Sony's few solidly performing businesses. With Sony in the red for all but two years of Stringer's tenure, Hirai certainly has his work cut out for him.

Stringer had attempted to streamline power in 2009, taking over as both president and CEO during the height of the financial crisis. However, his efforts failed and the company continued to falter, with a series of events including the 2011 Japan earthquake and tsunami exacerbating the situation.

"As challenging as times are for Sony now, were it not for the strong leadership of Sir Howard Stringer these past seven years, we would have been in a much more difficult position", he says. Hirai called Sony's future path "clear", focusing on its core electronics business, innovation, and turning around its television efforts.

Televisions are Stringer's biggest failure. With $2.3 billion in losses projected in the fiscal year 2012 alone, the company is faced with making up those losses plus another $6.3 billion accumulated since 2004. Hirai was successful in turning around the gaming division, but investors are skeptical he could do the same for TVs.

Sony has yet to make money selling televisions, unlike competitors LG and Samsung. Hirai technically did not make that much money selling PlayStations either: the devices are sold at a loss or for a small profit in hopes the difference is made up through consumers purchases of games, a "loss leader".

With televisions, there is no attach rate.

Sony will report its earnings on Thursday. The company is widely expected to report yet another quarterly loss, so Wednesday's announcement of a new CEO may be designed to deflect attention away from the company's continued struggles.