In a move that further emphasizes many of the problems Sony has been having over the last year with the introduction of their next-generation PlayStation 3, today Ken Kutaragi will take the position of chairman and chief executive of Sony Computer Entertainment. Replacing him as Sony Computer Entertainment’s global president and chief operating officer will be Kaz Hirai, previously leading the United States division.

All jokes about massive damage and giant enemy crabs aside, Sony describes the changes as “strengthening” its management line-up in order to better compete with Microsoft’s full year lead and Nintendo’s surprise Wii attack. Simply put, Kutaragi has been sidelined, technically promoted, to a position where he can do less damage than he’s done the past year. Kaz Hirai is known to be both more confident and more tactical in managing his public relations.

According to analysts quoted by The Financial Times the changes may spell an even darker future for the PlayStation brand of hardware itself:

“The appointment of Hirai could be the start of a shift from hardware to software,” said Yuta Sakurai, an analyst at Nomura. “I cannot now imagine a PlayStation4.”

Mr Sakurai said that Mr Hirai’s new global portfolio puts a predominantly software-focused manager in charge of the company, adding that SCE’s future would be shaped by Mr Hirai’s relationship with Phil Harrison, the president of SCE’s worldwide studios.

Given that the PS3’s main problems result from poor hardware choices from a commercial perspective, with Blu-ray and Cell being the main reasons for the immense delays in getting the machine on the market, the analysts may have a point. Biggest challenge for Kaz Hirai and Sony for the next few years is going to be compensating Microsoft’s lead while fighting off the Wii’s innovation-at-a-budget, and the only way they are going to succeed at that is to make sure the games are worth it. Let’s just hope they manage to survive their hardware branch as well, since noone is waiting for another growth market monopolized by Microsoft.

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