Ken Kutaragi

Sony Computer Entertainment

Ken Kutaragi is revered by video-game enthusiasts the world over as the father of the PlayStation. Yet, ironically, the highly driven Kutaragi has only recently won the respect of his peers at Sony headquarters. "They used to say I was merely lucky with the PlayStation," says the 52-year-old president and CEO of Sony Computer Entertainment Inc., the consumer-electronics giant's game unit. "But now they're realizing it was no easy thing to create an $8 billion business from scratch."

In fact, it's Sony (SNE ) that has lucked out. Kutaragi's company kicked in $1 billion in earnings in the business year that ended in March--60% of Sony's operating profits. PlayStation 2 could well break all kinds of records. In the first 30 months since PS2 was introduced, Sony sold 40 million units, more than twice as many as the original PlayStation in the same time frame. The first one still ranks as the best-selling console on the planet.

Kutaragi is a rare breed in Corporate Japan: an engineer with vision and marketing smarts. But success didn't come easily. As a young researcher in the 1970s, he developed a liquid-crystal-display projector that Sony refused to approve, thus missing out on a new market. He also worked on a disk-storage camera that was years ahead of its time. Even after PlayStation launched in 1994, says Kutaragi, "many in Sony looked down on us because we were in games."

Not anymore. Kutaragi's PlayStation business model--using low-margin hardware to sell high-margin software--is being emulated throughout the company. Now he's overseeing development of a supermicroprocessor to power a console to handle all kinds of entertainment flowing into homes over broadband networks. If he creates another megahit, he could be running the entire Sony show someday.


-- Created cash cow out of video-game business, which contributed 60% of Sony's operating profits in the year ended in March

-- Developing new chip to power network machine capable of sending interactive games, movies, and music over broadband networks

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