Chapter 1Sony, the One and OnlySony can do no wrong even when Sony is very wrong.
—Matt Casamassina, former editor in chief, IGN Nintendo Team
The Emotion Engine—the only emotion I got from it was despair.
—Anonymous
The Second Coming of Sony
Sony had a record-breaking year in 1998, raking in over $51 billion in sales and operating revenue. Profits from television sales had spiked in 1997 and continued climbing. Having recently released such notable flops as The Cable Guy and Striptease, Sony’s movie studios turned a corner as well, releasing hits like Men in Black and Air Force One. Picking up where Walkman left off, Sony’s Discman hit pay dirt in the United States, and its new MiniDisc audio format caught on quickly in Japan. Then, of course, there was the PlayStation.
Sony shipped 4 million PlayStations in 1995, 9 million in 1996, and 21 million in both 1997 and 1998. Nintendo sold fewer than 35 million N64 consoles during the console’s seven-year life span. The Sega Saturn never reached 10 million.
Sony was one of those companies with the magic touch in the mid-to late 1990s, but those halcyon days were about to come to an end.
While PlayStation carried Sony to new heights, the company’s other businesses began snagging. Samsung made a big push into the bustling North American television market, selling competitive sets at considerably lower prices. The 2001 release of Apple’s first iPod obliterated the MiniDisc and Discman markets. Familiar names like Canon and Nikon took over the high-end digital camera business. Nokia overtook Sony-Ericsson as the leader in mobile phones until 2007, when Apple released its first iPhone and everything changed.
With layoffs, plummeting stock prices, and vanishing markets, the only bright spot on Sony’s horizon was PlayStation. By 1998, the game console was well on its way to replacing Walkman as the most successful consumer electronics line in history. This made engineer Ken Kutaragi—who first arrived on the video game scene helping Sony create the audio chip used in the 16-bit Super Nintendo/Super Famicom (also known as “Super Famicom,” “Super Nintendo,” and “SNES”)—both a demon and a deliverer around Sony Corporation.
I was with Mr. Kutaragi yesterday. I have to say that he’s a different breed of animal. He’s an engineer, but also he has tremendous acumen for management. So, he’s a different breed.
—Shukuo Ishikawa, chairman, Bandai-Namco Group
His first project was . . . if you remember back in the 1970s or early 1980s, if you had a cassette player, it may have had a graphic equalizer built into it, little ascending red and green and yellow lines that would show the signal strength as the music volume increased. Ken was the inventor of that.
He has the patent for the LED bars rising as the music peaked and the bar that was on the top would stay on for a while as the sound dropped away so that you could see where the peak got to. That peak level meter LED design was his invention, or co-creation. I think there were a couple of other people involved on the patent as well.
—Phil Harrison, former vice president, third party relations, Sony Computer Entertainment America
But Kutaragi was a brash, temperamental, and outspoken man in a society that taught that “the nail that sticks out gets hammered down.” Sure, he was a brilliant, driven engineer, but he didn’t fit into Sony’s traditional power structure.
PlayStation sales carried Sony through a dry spell, but at the cost of empowering Kutaragi and further infuriating his corporate rivals. Misery loves company; it despises other people’s success. Many Sony executives openly despised Kutaragi, describing him as disrespectful, abrasive, and something even more unforgivable in Sony’s buttoned-down culture: “untraditional.”
In July 2000, Sony invited ten top influencers and opinion leaders to tour its corporate headquarters in Tokyo. Richard Doherty, founder and chief analyst of Envisioneering, attended the summit, as did Suzanne Kantra of Popular Science, Rolling Stone writer Steve Morgenstern, and futurist Tim Bajarin of Creative Strategies. The group met with Sony’s top executives and premier designers, including Kutaragi, who seemed flustered when he realized the group included a reporter he’d been trying to avoid.
The tour closed with a cocktail party attended by Kunitake Ando, the newly appointed president of Sony Corporation. Seeing the reporter who had so flustered Kutaragi, Ando congratulated him on the accomplishment, presenting him with a business card and offering to help him with future projects. As Ando walked away, analyst Rick Doherty commented, “You better hold on to that card. He just gave you the keys to the kingdom.”
Ken was a, you know . . . it wasn’t like he was a table-thumping shouter, but he definitely got passionate about things. I remember one argument with him about something which to this day I can’t remember the details. It’s probably insignificant. His way of finishing the argument was to say, “Well, if you think that, then you must resign.” It was a very kind of emotional way to say, “I don’t want to have this argument anymore.”
—Phil Harrison
The animosity between Kutaragi and his superiors traced back to the early days of the PlayStation project. In the early 1990s, Kutaragi had led the engineering team assigned to co-develop a CD-ROM drive with Nintendo for the Super NES/Super Famicom. Believing that Sony planned to use the unit to open a game division, Nintendo executives quietly abandoned the partnership without telling Sony. Nintendo announced its breakup with Sony and its new partnership with Dutch mega-conglomerate Philips N.V. at the 1993 Consumer Electronics Show the day after Sony announced it was building the “Play Station” drive with Nintendo.
Blamed by some executives for having brought shame to the company, Kutaragi approached Sony chairman Norio Ohga for permission to convert his PlayStation disk drive into a stand-alone game console. While the rest of the board argued against it, Ohga gave Kutaragi permission to pursue the project. Citing Nintendo’s betrayal, Ohga shouted, “Do it!”
There was a meeting with only maybe eight people in it. No other executives. It was just Kutaragi’s team pitching Ohga. Ohga was personally interested in the project.
And after Ohga saw the whole presentation, he just said, “Go for it. Do it. This is a project that Sony needs to be in.” He just decided it by himself. No other executives voted, only Ohga. Ohga said “do it” and that became a legendary story.
—Shuji Utsumi, former vice president of product acquisition, Sony Computer Entertainment America1
Copyright © 2021 by Steven L. Kent. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
