Monday, Apr. 26, 2004

Ken Kutaragi

Twenty years ago, the video-game business was a niche hobby, so nerdy that nerds were embarrassed to be associated with it. Now, thanks in large part to Ken Kutaragi, the president and CEO of Sony Computer Entertainment, video games take in more money than movies. An electrical engineer by training, he joined Sony in 1975, but his gut-check moment didn't arrive until 1990, when Nintendo backed out of a partnership with Sony to build a new video-game machine. Most in the company wanted to cede the battlefield, but Kutaragi believed Sony could go it alone; he led an in-house splinter cell that developed a new game console from scratch. The PlayStation debuted in 1994. By the end of the decade it was generating 40% of Sony's operating profit.

Kutaragi did it all over again in 2000, getting Sony to make a $2.5 billion bet on the PlayStation 2. Unlike earlier consoles, which were cobbled together mostly from off-the-shelf components, the PlayStation 2 was engineered from the silicon up to be a dedicated game-playing monster. And Kutaragi courted outside game developers, so there was no lack of new strong software. The PlayStation 2 has bulled its way to a market share of around 70%. Kutaragi's flamboyant management style has raised some eyebrows within the staid halls of Sony. Legend has it he once offered to settle a dispute over the PlayStation's design with an arm-wrestling match. But he has earned his swagger. If video games are the storytelling medium of the coming century, Kutaragi is their Gutenberg.

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