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Analyst: Sony To Shift Toward Software Focus

Following yesterday's news concerning major executive reshuffles at Sony Computer Entertainment Inc. (SCEI),
December 01, 2006
Following yesterday's news concerning major executive reshuffles at Sony Computer Entertainment Inc. (SCEI), a report from the Financial Times British newspaper has quoted analysts who feel that this could signify the technology giant's eventual move out of the video game console hardware market. Yesterday SCEI officials announced that Kaz Hirai, formerly president and CEO of Sony Computer Entertainment America (SCEA), was named as SCEI's president, while the division's former lead, Ken Kutaragi, took up a new role as chairman. While Sony described the changes as “strengthening” its management, the report notes that the move could represent a “critical shift in management thinking.” “The appointment of Hirai could be the start of a shift from hardware to software,” commented Nomura analyst Yuta Sakurai, who added, “I cannot now imagine a PlayStation 4.” According to Sakurai, Hirai's software-focused past would seem to indicate a possible new focus for SCEI going forward, while the executive's working relationship with Sony Worldwide Studios head Phil Harrison would help further steer the company's eventual course. However, other analysts do not seem so sure that the management shift signifies anything so dramatic, with some noting belief that Kutaragi will still play a key role within the division despite his new position. Specifically, KBC analyst Hiroshi Kamide believes that it will Kutaragi who will work to doctor strained relationships with third party developers and publishers following repeated delays and shortages of the PlayStation 3 hardware.

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