Kutaragi led the team that created PlayStation but the recent issues surrounding the introduction of PlayStation 3 seems to have taken their toll in the boardroom.
A Sony statement explained, "Kutaragi will continue to oversee the entire SCE group as chief executive officer, and will fully exercise his power to reinforce and further accelerate the development of the PlayStation business."
Hirai has led the firm's US business since 2003 and assumes the new Tokyo-based role today.
Jack Tretton, currently head of Sony's US gaming business, will replace Hirai as boss of Sony America. "Given his experience and exceptional reputation in the industry, I can think of no better person to assume the helm of the PlayStation brand in the US, Canada and Latin America," Hirai said.
David Reeves has also now been appointed vice president at Sony Computer Entertainment. All move are effective from Friday.
The way the PS3 launch has been handled, a board-room shuffle was inevitable.
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