Sony's "Father of PlayStation" to step down

By Lisa Baertlein and Kiyoshi Takenaka

LOS ANGELES/TOKYO (Reuters) - The architect of Sony Corp.'s (6758.T) (SNE.N) PlayStation, Ken Kutaragi, will step down on June 19, at a time when the Japanese company is fighting to reassert its lead in the video game market.

Known as the "Father of PlayStation," Kutaragi, 56, took a lead role in the invention of the Sony game console in 1994 and the PlayStation 2 in 2000. Known as a company black sheep, he bucked consensus to turn video games into a cash cow, but lately has seen his status diminish.

Sony has sold more than 200 million units of these consoles globally, though the PlayStation 3 has made a weaker-than-expected showing against Microsoft Corp.'s (MSFT.O) Xbox 360 and Nintendo Co. Ltd.'s (7974.OS) Wii console since its launch last year in the $30 billion video game market.

Nintendo, which entered the three-way console race in the underdog position, on Thursday stunned investors with a nearly eight-fold rise in quarterly operating profit and forecast stronger than expected growth for the year.

Kutaragi will retire as chief executive of Sony Computer Entertainment Inc., known as SCE, and become honorary chairman. He will also act as a senior technology adviser to parent Sony Corp., the company said on Thursday.

Kazuo Hirai, the division's current president and chief operating officer, has been promoted to group chief executive in charge of the PlayStation business.

Analysts said Hirai has big shoes to fill.

"Mr. Kutaragi is a legend in the gaming industry. He beat entrenched competitors who had been in the business for years, like Nintendo and Sega," said Jupiter Research analyst Michael Gartenberg. "He dominated two generations of console cycles, which was unheard of in the industry."