Why Sony's Heir Apparent Kazuo Hirai Could Be Good for Hollywood

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The current issue of The Hollywood Reporter magazine looks at the man who turned around the company's video game unit who will likely succeed CEO Howard Stringer.

With the tragedy in Japan continuing to unfold, it’s not surprising that Sony’s stock has been punished with a sharp dip. Obviously the future holds great challenges for the nation and not just one electronics company.

Having said that, change was under way at Sony before disaster struck. A recent reorganization positioning Kazuo Hirai, 50, as the likely successor to CEO Howard Stringer has some observers wondering whether new management would sell the entertainment operations. But analyst Daniel Ernst in the Tokyo office of Hudson Square Research believes Hirai, who turned around the company’s video game unit, will press for the notion of hardware-software “synergy” (to use a now-quaint term) that was the original justification for Sony’s acquisition of Columbia Pictures more than 20 years ago.

“Hirai-san started his career at Sony Music Japan before going to the PlayStation group and therefore has good experience in both content and electronics,” Ernst tells THR in an e-mail, adding that marrying content with hardware is “the only way Sony will be able to differentiate in electronics and survive the ongoing encroachment by the likes of Apple.”

The sentiment mirrors feelings among some Sony insiders on the Culver City lot. “He’s more American-ized than most of the Japanese executives,” an executive says. “He lived in San Francisco, speaks fluent English, understands the entertainment business.”

Top Sony Pictures brass, including chairman and CEO Michael Lynton and co-chairman Amy Pascal, have worked with Hirai, and their relationship is said to be good. Lynton’s contract runs through 2012, and Pascal re-upped for five more years in December.

Plus, a veteran Hollywood observer notes that even if Sony wanted to sell its entertainment company — which has been hampered on the TV side by the fact that the Japanese company can’t own an American network — it might be hard to make a deal in the current business environment.