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Sony's New CEO Sees a Tough Road Ahead

By - Source: The Wall Street Journal | B 0 comment

Kazuo Hirai, who takes over as President and CEO of Sony Corp. in April, believes the company needs to set aside previous tradition and focus on the new "user experience" in order to succeed.

As reported earlier this week, Sony's current Executive Deputy President and Chairman of its Computer Entertainment (SCE) arm, 51-year-old Kazuo Hirai, will serve as President and CEO of Sony Corporation starting April 1. He now admits that taking the reigns of Sony is a much tougher, bigger challenge than when he took the reigns of SCE back in 2006.

"I thought turning around the PlayStation business was going to be the toughest challenge of my career, but I guess not," he told the Wall Street Journal in an interview. "It's one issue after another. I feel like 'Holy s—, now what?'"

He said the company will be in serious trouble if it doesn't make adjustments, if it doesn't set aside past successes in manufacturing and focus on the user experience itself. That means shaking up the corporate structure which he blames as the reason behind the lack of product innovation and for keeping with prior tradition. That also means cutting costs like he did with the PlayStation business four years after Sony reported a horrid multi-billion loss.

"Sony cannot continue walking on the same path,” Hirai said on Thursday. "Sony needs to find new business areas, such as medical. We also need to select and narrow our business portfolio." He added that the key questions for hardware in production at Sony should be "What can you do with the product? What are your services? What kind of content do you have?"

"It’s not just about the hardware product, it’s about the user experience," he said.

Hirai joined the company back in 1984 by signing on with Sony Music. In 1995, he was assigned to run SCE America (or SCEA) where he played a vital role in the original PlayStation console's success. Then in 2006 he replaced Ken Kutaragi as SCE President with orders to restore profits after Kutaragi revealed that the PlayStation 3 would lose more than $2 billion in its first year.

One of the changes Hirai plans to make will be the way Sony itself develops products. Previously different business groups mapped out products independently -- a method Hirai said lead to a bloated and disjointed portfolio. "We're going to tell you what you are going to make—not the other way around," Hirai said. "This is a complete sea change."

On Thursday Sony said it expects to make a loss of $2.9 billion in the year ending March 31. That's more than double its previous estimate. Yet Sony shares rose as much as 8.9-percent in Tokyo trading, the biggest daily gain since 2009.

To read the full interview, head here.

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