New boss warns of 'serious trouble' ahead unless sweeping changes are made

Sony cannot go on like this, says CEO Hirai

Sony’s CEO-in-waiting has admitted he now faces an even tougher challenge than when he had to revive PlayStation’s fortunes, and has warned that the electronics empire must adapt or “could be sitting in some serious trouble”.

Kazuo Hirai, the SCE chairman who will become Sony chief executive on April 1st, is preparing to make sweeping changes across the entire global operation.

"I don’t think everybody [at Sony is yet on board with the changes], but I think people are coming around to the idea that if we don’t turn this around, we could be sitting in some serious trouble,” Hirai said in an interview with the Wall Street Journal.

Sony yesterday said it expects to make a loss of $2.9 billion in the year ending March 31st – more than double its previous estimate.

"I thought turning around the PlayStation business was going to be the toughest challenge of my career, but I guess not," Hirai said in his interview, which was conducted before the company’s financial report.

"It’s one issue after another. I feel like ‘Holy s—, now what?’"

Hirai took charge of the PlayStation business in 2006 when then-SCE president Ken Kutaragi revealed to the Sony board that PlayStation would lose $2 billion for the financial year.

Once appointed Kutaragi’s successor, the 51 year-old Hirai quickly took steps to reduce the cost of producing PlayStation 3 units to end the haemorrhaging cash flow at SCE.

Big calls

Now as Sony’s next CEO, Hirai has pledged to again make tough decisions, and will review more than 20,000 Sony products.

“Sony cannot continue walking on the same path,” Hirai said yesterday at the investor meeting.

“Sony needs to find new business areas, such as medical. We also need to select and narrow our business portfolio.”

He said Sony “cannot just continue to be a great purveyor of hardware products, even though some people expect us to do that".

Hirai wants the firm to focus on the user-experience itself. He said 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?”

He added: “It’s not just about the hardware product, it’s about the user experience.”

Sony’s shares rose as much as 8.9 per cent in Tokyo trading, the biggest daily gain since April 2009.

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