Sony console guru to work with Namco

Ken Kutaragi, the engineer known as the father of the Sony PlayStation videogame console, is to split his time between Sony and a new joint venture with Japan’s Namco Bandai, as Sony attempts to reinforce fraying ties with third-party game developers.

The new venture, called Cellius, comes as sales of the PlayStation3 in the US and Japan – launched in November – have slowed dramatically in the face of high prices and a shortage of “must-have” games.

Mr Kutaragi will continue to serve as chairman of Sony Computer Entertainment while serving as a part-time executive director at the new venture, which is 51 per cent owned by Namco and 49 per cent by Sony.

Mr Kutaragi’s appearance on the board of Cellius comes just seven weeks after he was made chairman of SCE, a nominal promotion which removed him from the day-to-day running of the business amid signs of strained relations with Sir Howard Stringer, Sony’s chief executive.

Cellius has the task of developing games that exploit the advanced capabilities of the powerful Cell processor in the PS3. The Cell chip, co-designed by Sony, Toshiba and IBM, boasts supercomputing capacity but game studios have yet to tap its full potential, given the high cost of designing games for the PS3 in general.

Some observers speculated that by giving Namco Bandai direct access to Mr Kutaragi, Sony was hoping to ensure the loyalty of a developer whose only two PS3 games are the top and second-best selling titles for the console.

Credit Suisse games analyst Jay Defibaugh noted that Namco Bandai has assigned Isao Nakamura, one of its foremost games developers, to run the new joint venture, even though “developing games for the PS3 carries a lot of risk”.

A spokesperson for Sony said that the joint venture will not design software just for the PS3, but also for regular PCs, handheld devices and mobile phones – all products offered by Sony.

Since November three major Japanese games developers have acted to reduce their exposure to Sony’s flagship console.

Square Enix said last month that Dragon Quest IX, the latest instalment in a series that racked up 41m in game sales for previous PlayStation consoles, would only be produced for Nintendo’s handheld DS machine.

Koei and Sega Sammy have both said that games previously earmarked as PS3 exclusives will now also be developed for its rival platforms, Nintendo’s Wii and Microsoft’s Xbox 360.

Sony still hopes PS3 sales will get a lift from promised exclusive sequels later this year in Square’s Final Fantasy and Konami’s Metal Gear Solid series. The loss of exclusivity for the PS3 for either game would be a serious blow to the game console’s short-term sales prospects, said Nomura analyst Yuta Sakurai.