Sony's Kutaragi Steps Down

PlayStation creator Ken Kutaragi will leave Sony at the end of June, the company revealed Thursday. This is only the latest in a string of developments which show the company is serious about turning around its business.

After years of being the top video game maker, it now finds itself in third place behind a resurgent Nintendo and surprisingly strong Microsoft. While Sony expected the video game unit to help it recover, it instead is doing exactly the opposite.

The high retail price for the console has slowed its sales, say many analysts, and much higher spending than initially anticipated have doubled its originally forecasted losses for its video game unit - now expected to be around $2 billion USD.

Kutaragi will stay with Sony, but only as an "honorary chairman" and senior technology advisor. The resignation of the PlayStation creator also likely means the video game division will be more directly controlled from the top - Kutaragi preferred to have a lot of control over the platform.

In fact, Kutaragi's replacement Kazuo Hirai, is widely considered an ally of Sony CEO Howard Stringer. Hirai formerly was the head of the American arm of the PlayStation unit, and was named president of the worldwide arm late last year.

Stringer and Kutaragi have also had their disagreements - the latter's issues in communicating with other Sony officials caused him the loss of control of the daily operations last year, says the Wall Street Journal.

Kutaragi also went over budget during development of the PS3, and even questioned Sony's manufacturing practices, further angering Sony officials.