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Game over for Kutaragi-san - April 27, 2007

I’ve often wondered how committed Sony Computer Entertainment chairman Ken Kutaragi was to the decision to include a Blu-ray Disc drive in ever PlayStation 3 console.

In his public comments, Kutaragi always referred to Blu-ray as “essential” to PS3, but it’s hard to see how he wouldn’t have felt at least some ambivalence.

Under Kutaragi, SCE was famously insular, resistant to coordinating its activities with other divisions of the company. It would have been a departure for him to have eagerly embraced another division’s product development as his own, especially when it was clear that Sony Electronics would be drafting off the popularity of Kutaragi’s PlayStation franchise to accelerate sales of Blu-ray more than the other way around.

He is enough of an engineer to have known that including a Blu-ray drive would significantly increase the cost of PS3 consoles, putting PlayStation at a competitive disadvantage to the Xbox 360.

The competitive disadvantage only become more acute when Nintendo’s Wii console proved an unexpected hit on the strength of its innovative controller and its low price.

Had the strategy worked, of course, and the marriage of Blu-ray and PS3 proved a competitive advantage for both, Kutaragi might have emerged as twice the hero he already was, responsible for the triumph of Sony’s two most important strategic initiatives of the past decade: PlayStation and Blu-ray Disc.

But the strategy has so far not been notably successful (ahem). PlayStation 3 remains mired in third place in the console wars, struggling with the high-price imposed on it by Blu-ray.

Component shortages and production delays related to Blu-ray also delayed the launch of PS3, letting Xbox enjoy a full year head start in the market.

At the same time, manufacturers of standalone Blu-ray players are finding it hard to compete with the (relatively) lower priced PS3 console, forcing some to resort to introducing dual-format high-def players to differentiate their products, undercutting Blu-ray’s position in its battle against HD DVD.

Now, Kutaragi is leaving Sony, and his departure is being portrayed in the press as his taking the fall for the slower-than-expected start for PS3.

Maybe he is to blame. But if adding Blu-ray to PS3 wasn’t his idea than his failure had many fathers.

 

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