Ken Kutaragi, the engineering guru behind the Sony PlayStation, is to retire as head of Sony’s gaming division, amid weak sales of its latest PlayStation 3 console.

Mr Kutaragi was sidelined from the day-to-day management of the division – Sony Computer Entertainment – in December when he was appointed chairman and chief executive of the group.

At the time, Kaz Hirai was named as the game unit’s president and chief operating officer and yesterday he was promoted to president and group chief executive, effectively replacing Mr Kutaragi and taking overall control of the PlayStation business. Mr Kutaragi will become honorary chairman of Sony Computer Entertainment and act as a senior technology adviser to the parent Sony Corp.

He is retiring at a time when the £425 PlayStation 3, beset by delays and cost overuns, is fast losing ground to Microsoft’s Xbox 360 and Nintendo’s Wii console, which costs £179.99.

In a statement, Mr Kutaragi said he would pursue work beyond PlayStation and accelerate his network vision. “I’m looking forward to building on this vision,” he said.

His retirement as head of the gaming group marks the end of a long struggle between the 56-year old inventor and Sir Howard Stringer, Sony Corp’s chief executive.

Mr Kutaragi invented the PlayStation in 1994 and developed the PlayStation 2, launched in 2000. Combined, there are more than 200 million units in use globally and for many years PlayStation easily dominated the competition.

However, inflated PS3 production costs and severe delivery delays have pushed Sony’s game division to a likely loss of more than 200 billion yen ($1.7 billion) in the past business year.

Meanwhile, Nintendo yesterday said strong sales of Wii consoles helped to more than double its operating profit to a record 226 billion yen in the year ended March. In Europe and other areas outside Japan and the Americas, Nintendo sold 1.47 million Wii consoles in the period, against an estimated 920,000 PlayStation 3 consoles sold across Europe – although Sony’s device is much more expensive, at £425. The Wii has also outsold the PlayStation 3 in Japan and the United States.

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