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Japan's Sega Appoints COO Sato As New President
Sega Corp said on Wednesday it had appointed Chief Operating Officer Hideki Sato as its new president, entrusting him with guiding the firm through a tough bout of restructuring. Sato, who was also vice president, replaces the charismatic Isao Okawa, who died of heart failure aged 74 on Friday.
"The company believes Sato is the best person to take on the leadership because he has long experience and a deep knowledge of the company's technology and management," a spokesman said. Yoshiji Fukushima, a Sega director and chairman of information service firm CSK Corp, was appointed chairman, Sega said.
The 50-year-old new president faces the daunting task of reinventing the company primarily as a game software developer following the abandonment of its loss-making Dreamcast game console business earlier this year.
Sato's appointment comes as a surprise after Japanese media this week quoted company sources as saying 40-year-old special adviser and co-COO Tetsu Kayama would get the job after a shareholders meeting to be held in June.
Sega said Kayama will play a core role in management, supervising the company's restructuring plan and operations at its software development division. Kayama was brought into Sega by Okawa late last year from publishing company Recruit Co, where he was engaged in the company's game and content business.
Analysts said Sato was the best choice for the job because he had gained the respect of Sega's 4,500-strong workforce after working there for 30 years. He has also been a member of the board for more than a decade.
"Kayama has just joined the company and has not proved his ability yet," said Takashi Oya, a senior analyst at Deutsche Securities.
"It would be too much of a burden for him and too risky for the company to give power to Kayama at this time."
Industry sources said CSK, Sega's largest shareholder, initially wanted Kayama to become president, but company executives opposed the move.
"Sega made the right choice," Oya said. "Sato will retain the trust of staff while Kayama can swiftly implement the restructuring plan that Okawa mapped out as the firm's former powerful leader and financial supporter."
In January, Okawa grabbed media headlines when he made a private donation of 85 billion yen to Sega in an unprecedented step to ease the company's financial pain.
Shares in Sega, which slid more than five percent on Monday amid anxiety fuelled by news of the outspoken Okawa's death, rebounded on Wednesday. Tuesday was a national holiday.
They closed up 8.75 percent at 2,000 yen, outperforming even a dramatic 7.49 percent jump in the benchmark Nikkei index
Oya maintained Sega's target share price at 2,500 yen, saying the shares will have even more room to rise if it gains solid support from banks, allowing the game maker to raise funds easily.
SOURCE: REUTERS
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