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The Sony Schism

Reuters, Tokyo
The Bellagio casino-hotel in Las Vegas hosted a shotgun wedding in January. The bride and groom had met just wars since Sony has produced a new mega-hit device. Its TV business is an albatross that has accumulated losses of $10 billion. The company is on course for a fourth straight annual net loss for the year ending March 31. Efforts to connect its vast entertainment and games content with its huge menu of gadgets began waybackinthe 1990s - but are still a work in progress.
What has flourished at Sony, after a bumpy start, is its PlayStation business, which Hirai ran for five years. His plan is to apply the PlayStation model company wide: extend its network to the rest of the Sony gadget family to create a unified contentdelivery platform. Even if not by intent, it is a model close to Apple Inc and its iTunes.
The Sony Computer Entertainment model "is a bigger concept we can growinto a bigger space," Hirai, 51, said in a group interview at the company's Tokyo headquarters last month. "Hardware drives software and software drives hardware."
Interviews with former Sony
bosses and executives, as well as current managers who will be working with Hirai, paint a picture of an executive who may have the managerial and personal skills to reach a prize that eluded his two predecessors.
But they warn he faces a daunting task in marrying hardware and software in the Sony family, which remains hobbled by a schism that undid his predecessors: a rift between old-guard gadget engineers and a new guard of executives that see the future of Sony in online networks and the entertainment content they deliver.
If he succeeds, he could be the man who saved Japan's most famous company. Failure means presiding over the fall of an electronics empire that once held sway over the world's consumers. Astock slide from an already depressed price, analysts say, could make it an acquisition target or, more likely, lure in private-equity investors who could sell off packaged units of the company bit by bit.
Hints are emerging that Hirai may begin his comeback attempt by kicking his newlywed TV bride outofthe Sonyhome.
"I think we have issues to
address around the TV business," said Andy House, the head of Sony Computer Entertainment, which he took over last year when Hirai moved on to a wider role in the company.
An option being mulled, another executive told Reuters, is to divorce TV from the rest of Sony and try and merge it with the battered TV businesses of Japan's other struggling set makers. Both Panasonic and Sharp are in trouble. It would be a marriage of convenience that a Japanese government anxious to safeguard jobs and spawn national champions could help forge, the executive added.
A framework for such a grand compact exists already. Last year, Sony agreed to bundle its small operations for making liquid -crystal display screens with those of Toshiba Corp and Hitachi Ltd. The merged company, Japan Display, is two-thirds owned by the taxpayer-funded Innovation Network Corp of Japan.
Hirai has geek cred. As head of the videogame business, he once got hold of a specialist traindriver control to play a train simulator game, "which gave me endless fodder for geek jokes", House recalled in an interview.