Innovation is the lifeblood of any successful company. When employees find inspiration to invent and support to follow through, that’s when the stars align for individual growth and business innovation.
And the story of the invention of the PlayStation is a prime example of how great ideas can come from anywhere. A great idea might be a product of an employee tinkering with his daughter’s Nintendo console. This story shows the power of capturing and nurturing employee ideas and the potential for those ideas to lead to breakthrough products, services, and even entire divisions within a company.
About Sony
Sony Group is a multinational corporation that manufactures and sells electronic devices as well as associated services. Sony Computer Entertainment developed the PlayStation, famously known as the PS1/PS, and released it between 1994 and 1995.
As a home video game console, the PlayStation primarily competed with the Nintendo 64 and the Sega Saturn. But that’s not how the story began. Before turning into competitors, Nintendo and Sony intended to team up. Let’s trace how PlayStation came into being.
The invention of the PlayStation: How it all began
Ken Kutaragi, an electrical engineer at Sony, first came up with the idea of a CD-ROM-based gaming system while watching his daughter play with the Nintendo gaming console.
He was working at Sony’s sound labs when he purchased a Nintendo Famicom gaming console for his daughter. Ken observed that his daughter wasn’t happy with the game’s sound quality. Based on his experience, he determined that a digital sound chip would improve the quality of the Nintendo game.
Initially, when he approached his superiors with the notion of developing a new system for Sony, they did not show interest in venturing into a new market.
So, Ken, while working at Sony, convinced Nintendo to deploy his SPC-700 sound processor in the Super Nintendo Entertainment System. His outside consultancy for Nintendo almost got him fired. However, Sony’s president, Norio Ohga, recognized the potential of his idea and decided to support his intrapreneurial spirit.
It resulted in Sony getting the contract to produce the SPC-700 sound processor for the SNES and a CD-ROM add-on.
The partnership eventually ended due to power play and Nintendo’s renouncement of their deal. It is still the greatest-ever betrayal in the industry. However, Sony continued to create its own platform, the PlayStation.
Ken went on to lead the charge in assisting Sony in the development of its own gaming system. He is known as the Father of the PlayStation. The Sony PlayStation debuted in 1994 and quickly became a popular home gaming device.
It’s remarkable how someone working in a completely different department can have a groundbreaking idea while playing with their children.
Companies who recognize the opportunity scale and increase inventability, while others fail sooner or later.
As rightly put by Ken, “I wanted to prove that even regular company employees could build a venture of this scale with superb technology, superb concepts, and superb colleagues.”
Results
Sony has always invested in employee innovation programs to give employees the freedom to innovate. It is one of the main reasons that led to the invention of the PlayStation and a whole new market division for Sony.
In the first four years of the invention of PlayStation, Sony’s yearly revenues increased to $7 billion. The PlayStation accounted for 40% of Sony Corporation’s operational profits by 1998.
Ken was quickly recognized for his significant accomplishment as a Sony intrapreneur. He was then named Chairman and CEO of Sony Computer Entertainment (SCEI)—Sony Corporation’s video game division. Kutaragi established SCEI as a major profit center for Sony Corporation.
