Sony has confirmed that PlayStation veteran Kazuo Hirai will be promoted to chief executive, replacing current CEO Sir Howard Stringer effective April 1. Stringer will become chairman of the company's board in June. The move comes as the electronics and entertainment company tries to engineer a turnaround seeking a strategy of closer integration between content, networked devices and services.
"Kaz is a globally focused executive," Stringer said in a statement. "I believe his tough-mindedness and leadership skills will be of great benefit to the company and its customers in the months and years ahead. I look forward to helping Kaz in every way I can so that succession leads inevitably to success."
Sony is expected to announce fiscal third-quarter earnings tomorrow and has already forecasted its fourth straight year of net losses for the fiscal year through March. Troubled by a strong yen eroding overseas earnings, the effects of last year's earthquake in Japan, and seven years of losses in the LCD TV business, the company has seen its stock value drop by more than 50% since Stringer took the helm in 2005.
The embarrassing hack its PlayStation Network suffered last year didn't help the company's image, either.
Kaz Hirai became chairman of Sony Computer Entertainment in August 2011 while leaving the role of president of the division to Andrew House. He was instrumental in the rise of the PlayStation brand during his years working for the division, and though the latest-generation PS3 was off to a rough start, it did recover from the dominance of the Nintendo Wii to reach a global installed user base of more than 60 million.
One of the toughest challenges ahead of him will be turning around the unprofitable TV business, but the company has already taken some steps to minimize losses. In December, Sony ended a seven-year LCD joint venture with Samsung and said it'd sell its nearly 50% stake to the South Korean company for $940 million. The Japanese firm will switch to cheaper outsourcing for LCD panels rather than investing in their production.