Ken Kutaragi

Former executive at Sony Computer Entertainment

• Born: August 8, 1950
• Place of Birth: Tokyo, Japan

Primary Company/Organization: Sony Computer Entertainment

Introduction

Ken Kutaragi was in large part responsible for the home game console phenomenon, almost singlehandedly forcing Sony out of its complacency and into the PlayStation era. Known as the father of the PlayStation and the Gutenberg of Gaming, Kutaragi was an iconoclast who did not fit the Sony mold. When he began, video games were a relatively small market with a nerdy image; he drove the PlayStation video game system to become a major money maker for Sony.

Early Life

Ken Kutaragi was born in Tokyo, Japan. His father had a small printing plant, and Kutaragi helped his father after school. Kutaragi always had the desire to tinker, often taking apart toys as a child to see how they worked. This curiosity continued through his teenage years. He learned the intricacies of electronics at Denki Tsushin University, where he acquired a degree in electronics engineering.

Life's Work

Immediately after graduation, in 1975, Kutaragi began working for Sony in its digital research labs. Sony at that time was a high-energy, creative company, and Kutaragi felt that Sony was on the “fast track.” He quickly gained a reputation as an excellent problem solver and a forward-thinking engineer. In the 1970s, as a researcher for Sony, Kutaragi created a liquid crystal display (LCD) projector that Sony rejected; the company thereby failed to capitalize on the new LCD market. Kutaragi's disk-storage camera was years ahead of its time. His sound-processing chip, inspired by a desire to improve on the inferior sound of the Nintendo system his daughter was playing, was produced in secret for Nintendo while he was working for Sony, which had no interest; however, the higher-ups were enraged when they discovered Kutaragi's activities on behalf of a rival firm; he avoided being fired, however, with the support of chief executive officer (CEO) Norio Ohga.

Kutaragi was vindicated in 1990, however, after building the PlayStation, which quickly surpassed the Super Nintendo Entertainment System as the leading home gaming system. In 1990, when Nintendo backed away from a partnership with Sony to build a game platform, most in Sony wanted to give up on game machines. Kutaragi and a small cadre of in-house dissidents built their own game console from the ground up, and it debuted in 1994. Even then, PlayStation was regarded as undeserving of respect because it was just a game machine. By the end of the 1990s, however, the PlayStation was bringing in 40 percent of the company's profits. PlayStation proved Kutaragi's business model—the use of low-margin hardware to sell high-margin software—and the rest of Sony began copying him.

In 2000, Kutaragi got the parent company to commit $2.5 billion to the PlayStation 2 (PS2), a departure from the historical game console pattern of combining off-the-shelf components in that it was a completely dedicated game machine. To make the PS2 viable, Kutaragi made sure that developers created ample and original software. In the first thirty months after its introduction PS2 sold 40 million units, double the sales of the original PlayStation in the same number of months. The PS2 as of 2003 was the number-one seller in the global market.

Game players around the world regarded the father of the PlayStation as an object of adoration, but his peers at Sony regarded the PlayStation as a fluke, a lucky guess. Slowly they became aware that it was not all that easy to bring a business to $8 billion from zero. Kutaragi's company provided $1 billion to the parent company in the fiscal year ending March 2003, 60 percent of Sony's operating profits.

When Kutaragi was preparing to debut the PS2 in Japan, his online order site developed a glitch. He was up all night. That was but one of his worries. Kutaragi could be fretful. He also worried about delayed deliveries, a sluggish market, and machines collecting dust in the warehouses. The PS2 was a 128-bit machine that could also play DVD movies and CD music. The PS2 retailed for $370 and provided high-speed, clear graphics offering shadow and a level of detail never before seen in a video game. There was a plan for US owners the next year to tie their PS2s to cable television for downloading and multiplayer online games. The PS2 took $2.5 billion to start but took 75 percent of the market by 2003. Both PS and PS2 exceeded 100 million units sold. Even massive start-up losses were recouped by the sales of the machines and software royalties.

Kutaragi had plans to make PlayStation a separate brand, free of the Sony network. He figured that only an open platform, not one tied to Sony, would attract the game developers. Kutaragi was not sure how such a product would bring in money, but he noted that PS was really boosting Sony stock. The company gave him quite a bit of leeway, because his division was so profitable; in fact, the PS would prove to be Sony's most profitable product. Kutaragi's games division was a $10 billion sales activity, bringing in 58 percent of the company's operating profits.

However, Kutaragi was moving beyond games, assigned the mission of reestablishing the ailing electronics firm and steering it toward a brighter future. The rest of Sony was slumping, especially consumer electronics. Kutaragi became a member of the executive board in 2003 and was rumored to be next in line as chairman and CEO of all of Sony, to replace Nobuyuki Idei, age sixty-six. His promotion to the board was intended to revitalize the company, and he did partner Sony with Samsung in the LCD screen business, where Sony had previously failed. He also was working on a simple-to-understand interface for the various Sony digital products—his effort to combine PS2 and the PSX digital video recorder did not fare well in the Japanese market. Kutaragi was an impatient micromanager, and he criticized those who blocked his attempts to revitalize consumer electronics, those who kept the company from working with other companies—both in public and in private. While running the consumer electronics part of the business, he also had to get onto the market the PS Portable, Sony's first handheld (released in 2004), and the PS3.

Kutaragi's move to head consumer electronics in 2003 did not work. Idei handpicked Howard Stringer to run the $60 billion company, removed Kutaragi from the board, and sent him back to being a full-time division chief. After the demotion, Kutaragi took a low-profile stance and let Stringer be the voice of Sony. Kutaragi said he felt that, although he had liked being in the inner circle, he was back at home in the entertainment division with his team and his PlayStation and was happy to have Stringer and the management team taking care of day-to-day matters so Kutaragi could develop the PS, which represented 120 percent of his life.

Six years earlier, Kutaragi had timed the PS3 to release at the same time as Blu-ray DVD and the Cell multimedia chip. The PS3 was to be the home control center, and Hollywood committed strongly to Sony's Blu-ray format, one of two formats competing to control the high-definition DVD market. The Cell chip was extremely fast, allowing lifelike graphics and realistic game play.

In November 2006, as Kutaragi prepared to put the PS3 into the hands of gamers, he ran into serious problems and had to delay its debut by six months. He acknowledged that incorporating Blu-ray, Cell, and Sixaxis, as well as other state-of-the-art technology, set back the PS3 and led to manufacturing delays that kept the PS3 out of players' hands longer than desirable. Analysts said that Kutaragi had mismanaged the product. Subsequent problems slipped the European release into March 2007, halving the number of machines available in Japan and the United States, forcing the company to revise its earnings to reflect larger-than-planned losses in the games division. Once the PS3 was available, users learned that it did not run older games. Three weeks after the debut, the games division reorganized. Kutaragi stepped down in April 2007.

PS and PS2 were smash record breakers, but the PS3 and PlayStation.com (the online service) were not competitive with Xbox Live, the favorite of online gamers. The PS3, with Blu-ray DVD capability and the Cell microprocessor, was technologically superior to the Wii, but Wii had motion-sensing remote controllers that PS3 lacked. The PS3 was still a game machine, not a home entertainment hub. US sales of the PS3 as of March 2007 were 1.2 million units. Wii sold 2.1 million, and Xbox 360 sold 5.3 million.

Kutagari was named honorary chairman of Sony Computer Entertainment, a position he held until 2011. After leaving Sony, Kutaragi became president and CEO of Cyber AI Entertainment; he also serves on the boards of Kadokawa Group Holdings, Nojima Corporation, and Rakuten, and was a visiting professor at Ritsumeikan University. In 2020, he became the CEO of Ascent Robotics, a software company that aims to surpass the capabilities of conventional robots. The company hopes to blend the real world with cyberspace without the use of gadgets or headphones, a goal that Kutaragi said is his life mission. He is not a fan of the metaverse.

At the 2014 Game Developers Conference, the largest international conference in the industry, Kutaragi was awarded the lifetime achievement award for his contributions to console gaming.

Personal Life

Kutaragi is married with children and neither drinks nor smokes. He was not the typical Sony company man; he was blunt, outspoken, and critical of his colleagues rather than conforming to the Sony style of working by consensus. Kutaragi was in some views cocky, hands-on, and not good at delegating, a lover of the limelight but a visionary who could see ten years in the future and bring his vision to fruition technically.

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