Sony has appointed long-time finance head Hiroki Totoki as its new CEO as the company undergoes a leadership overhaul while ramping up its multibillion-dollar efforts to produce more original content.
With new leaders taking charge of key divisions, including PlayStation, Sony is in the midst of a "creation shift" aimed at capturing a larger share of the $3 trillion entertainment industry.
Totoki will take over from Kenichiro Yoshida in April, in a well-flagged succession that has seen the new chief executive assume a series of high-profile roles in recent years, including chief operating officer and chief financial officer.
Yoshida, who has held the CEO post since 2018, will remain as chair, Sony said in a statement. The company’s share price has risen more than 22 per cent in the past 12 months and was up another 3.4 per cent by midday in Tokyo after Totoki’s promotion was announced.
“Totoki-san has been a key partner of Yoshida-san for more than two decades and a key part of Sony’s successful turnaround and shift deeper into entertainment”, said Jefferies analyst Atul Goyal.
“That said, Yoshida-san could lean on Totoki-san to execute his plans and the new CEO is going to need to find someone who can fill that role for him too”, he added. “So there are some big shoes to fill, both in becoming CEO and for his own replacement”.
Under Yoshida, the group has spent $10bn over the past six years to build its vast portfolio of games, films, and music — the three business segments that account for 60 percent of its annual revenue. It has also scored some big hits with titles such as The Last of Us, which was converted from a PlayStation game into a hugely popular television series, and Uncharted, another video game adaptation for cinema.
With Totoki rising to the top, the company has appointed its first female CFO, Lin Tao. Shinji Sashida has been named head of the imaging and sensors division, while Hideaki Nishino takes charge of the core games business, including PlayStation, following Jim Ryan’s departure last year. Hermen Hulst will continue to lead the company’s games studio business.
“Both have serious issues to address with PS5 having sold less than PS4, and the studios team unable to derive benefits from acquisitions such as Bungy, or deliver successful live service titles”, said Gareth Sutcliffe, head of gaming at research firm Enders Analysis
“One of the remarkable aspects of PlayStation’s growing dominance . . . is that the business hasn’t been run particularly efficiently in recent years,” Robin Zhu, analyst at Bernstein, said in a recent note to clients.
“With new leadership in place, and broader Sony in efficiency mode, we expect lower ‘M&A costs’ . . . and cost reduction elsewhere — to be areas where PlayStation can under-promise and over-deliver”, he added.