Sony Plans Comeback with Software, Gaming

Hirai formerly headed the successful PlayStation division, and eked out profits through ruthless cost cutting and realistic expectations. The company posted a $2.9 billion loss for the last quarter, but Hirai plans to carry out a wide-ranging, intensive program to reverse company fortunes and trigger much-needed innovation as the aging electronic giant pushes into the mobile market.

"I have a very strong sense of crisis about the environment surrounding us", said Hirai in a press conference. "We cannot be afraid to make painful choices for the future of Sony. Our rivals and the operating environment won't wait for us".

Hirai intends to dramatically cut the product line, making fewer products and focusing on a smaller, higher quality line. Hirai's strategy includes building up Sony's software offerings, which he acknowledges as weak, and using the company's current strengths like gaming and digital imaging to create premium mobile technology.

Hirai's vision for a mobile push bolstered by Sony's gaming and imaging businesses makes the company's decision to purchase Ericsson prudent, as Sony can now pursue its mobile expansion with complete control over its product. The Ericsson acquisition also stipulated intellectual property cross-licensing, which will be helpful with integrating Sony's entertainment holdings with its mobile devices.

Sony boasts huge entertainment holdings, including the rights to Michael Jackson songs, but it has not capitalized on these assets. Hirai spoke of a "convergence" strategy for melding the company's media properties with its devices.

Hirai's experience with cloud technology is also an advantage, as he can play a key role in helping the company move to a comprehensive cloud network for Sony's products. A strong cloud offering may further bolster Sony's integration campaign and strengthen its brand by offering users the ability to use media on multiple devices.

Sony's reinvention plan will face additional challenges in a highly competitive market. Sony requires an extensive overhaul just to compete with companies like Samsung and Apple in mobile technology, and then it must contend with other upstarts like HTC and LG.

Smartphone and tablet makers struggle to gain customers even with advanced networks, entertainment options, and operating systems. Sony's ascent into the competition will hinge on its ability to distinguish its devices, most likely through its established gaming reputation and strong digital displays.

Hirai's strategies recognize both his company's dilemma as well as its strengths, and his experience also bolsters his chances at success. Sony's current crisis is severe, but Hirai's bold plan is yet untried, and analysts and investors will watch Sony's broad stab at reinvention with interest.