This is an article about an Intrapreneurial (corporate entrepreneurial) creation of the Sony PlayStation by persistent and driven intrapreneur Ken Kutaragi, who’s international Intrapreneurial Success story has now be one of the most celebrated in business history.
Sony network sites such as Sony Corporation of America, Sony Pictures, Sony Electronics, and old websites such as Sony Santa including personal information were all accessible.
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Intrapreneurship has been successfully utilized by corporations, partnerships, and non-profit firms in the US, Europe, Asia, and Africa. The underlying conception and idea of Intrapreneurship or Corporate Entrepreneurship had been present in corporations in the United States, Japan, and all the world over, for many decades, even prior to the term was used throughout the mid 1980′s in the mainstream media.
Howard Edward Haller’s (now a Ph.D.) Master’s Thesis was published in 1982. Haller’s Thesis was the first academic case study of Intrapreneurship. This, inside the house, research focused on the “super mini computer ” manufacturer PR1ME Computer’s successful Intrapreneurship adventure from 1977 to 1980. The intrapreneurial success of PR1ME Leasing helped the small growing OTC listed parent corporation (PR1ME Computer Inc.) to grow quickly with strong sales and profits. This growth resulted in PR1ME Computer Inc. becoming listed on the New York Stock Exchange within four short years after launching the very successful Intrapreneurship adventure, PR1ME Leasing.
The terms and basic concepts of “intrapreneur” or “Intrapreneurship ” have existed and been effectively utilized in corporations for decades before the popular media put Intrapreneurship in mainstream media. On February 4, 1985 TIME Magazine’s article, “ Here come the Intrapreneurs ” discussed the Intrapreneurial spirit including the creation of Apple, and Saturn within General Motors, as well as Intrapreneurship ventures at AT&T, DuPont, Texas Instruments, and Data General.
Ken Kutaragi, who was educated as an electrical engineer, joined Sony Corporation in Japan in 1975, at the minimum age of 25. Ken Kutaragi was employed in the sound labs at Sony Corporation when he bought his young daughter a Nintendo game console.Ken observed his daughter playing with the new Nintendo game but he was displeased with the quality of the noise of the Nintendo game. Because of his education and experience in electronics Ken concluded that a digital chip, dedicated exclusively to sound, would significantly increase the quality of the Nintendo gaming system.
Because the Sony Corporation was not involved in computer games, Ken Kutaragi negotiated to keep his job at Sony, while working as an outside consultant (entrepreneur) for Nintendo on their computer gaming devices. Ken developed the “SPC7000” for the new generation of Nintendo games/machines.
After Ken’s success as a consultant to Nintendo the senior executives at Sony Corporation threatened to fire him after they discovered his sideline project with Nintendo. Fortunately for Ken, he had the strong support of Norio Ohga, the then Chief Executive Officer of Sony Corporation. Chairman Ohga personally recognized the value of Ken’s creativity, innovation, and entrepreneurial spirit, so he encouraged Kutaragi’s efforts.
Then with the Sony Corporation CEO’s support (and begrudgingly the rest of Sony’s senior management’s blessing) Kutaragi continued to work as a part-time consultant to Nintendo. Ken successfully developed a CD-ROM-based system for Nintendo.
Then in a life changing twist of fate Nintendo elected not to go forward with the CD-ROM system. Ken Kutaragi saw the market and business opportunity of computer gaming systems for Sony. Ken pressed hard to convert the Sony Corporation to enter the electronic gaming business with his Intrapreneurial spirit. While most of Sony’s senior management didn’t consider Ken’s computer gaming device more than a toy and not worthwhile for Sony, Chairman Ohga took a major chance and backed Kutaragi’s plan.
Ken was persistent and he became on to direct the effort to help Sony develop its own gaming system. This became the blockbuster product success “PlayStation”. Ken Kutaragi has been often been referred to as “The Father of the PlayStation, ” was well as all related Sony products, including Sony PlayStation Portable, Sony PlayStation 2, and the current Sony PlayStation 3.
Sony’s ‘System G’ 3-D technology, aka Sony PlayStation, was released in 1994. It immediately outsold Nintendo’s Super NES to quickly become the world’s top home-gaming platform. Ken’s group within Sony didn’t rest on its significant laurels, Kutaragi and Sony took another major financial gamble on PlayStation 2. Sony backed Ken’s corporate entrepreneurial (Intrapreneurial) venture by investing $2.5 billion into the PlayStation start-up, and has gone on to build over 70 percent of the home-video-game-console international market share.
Sony’s PlayStation product line is now the leading video-game platform. The financial payback to Sony has been astronomical. At of the end 1997, Sony’s PlayStation annual sales had grown to $7 Billion, in only first four years of the PlayStation product line existence. Ken’s Intrapreneurial (or corporate entrepreneurial) success has been called one of the great new business creations and launches in business history. This new Sony product line outperformed both the Sega Enterprises and Nintendo gaming machines since the 1994 PlayStation’s launch.
The Sony PlayStation has taken the clear market share of game consoles, with PlayStation sales of more than seventy million units at the end of the 1990′s. At that time, one in four United States households owned a Sony PlayStation product. The financial success of the Sony PlayStation was so impressive that by 1998, the PlayStation was providing 40 percent of Sony Corporation’s operating profits. The strong profits from the Sony PlayStation line still accounts for about one fourth of the overall Sony Corporation’s profits.
Kutaragi was soon rewarded for his significant success as an intrapreneur within Sony. Ken was promoted to be the Chairman and Chief Executive Officer of Sony Computer Entertainment (SCEI), the video game division of Sony Corporation. Kutaragi built Sony Computer Entertainment group into a major profit center for the Sony Corporation, as Chairman and CEO.
In late 1996, Ken was replaced as President of Sony Computer Entertainment and was promoted to Chairman of Sony Computer Entertainment. That was only a temporary situation as Ken retired from that position in 1997 and became the honorary Chairman of SCEI.
Dr. Howard E. Haller is Founder/CEO of the Intrapreneurship Institute. As a member of NSA, he regular speaks to Corporations, Associations, and Non-Profit Organizations on how to effectively use the innovation and creativity of Intrapreneurship (Corporate Entrepreneurship) within their Organizations. Intrapreneurship has successfully been utilized by corporations, partnerships and non-profit firms in the US, Europe, Asia and Africa.
The Intrapreneurship Institute can help evaluate, design, and implement an Intrapreneurship Program within a corporation to effectively utilize the intellect and creativity of human capital of an organisation to help maximize productivity and profits. The Intrapreneurship Institute can provide Executive Briefings, Keynote Speeches, and Workshops on Intrapreneurship plus the advantages and program features of an intrapreneurial program.
Howard E. Haller, Ph.D., is the Leading Expert and Thought Leader on Intrapreneurship, Intrapreneurship Program Design and Creation, Intrapreneurship Program Implementation & Operation, Using Intrapreneurship programs as a strategic tool for Recruiting and Retaining Key Employees, Increasing Innovation, and Entrepreneurship.
Contact Dr. Haller for inspirational Keynote Speeches, Motivational Speeches, Seminars on Intrapreneurship, Entrepreneurship, Innovation, Leadership, and Servant-Leadership.