The man behind the Sony PlayStation console is to retire, after the electronics giant sharply cut shipment targets for the PlayStation 3 (PS3).
The PS3 has a high-definition DVD player and cutting edge graphics
The "Father of the PlayStation", Ken Kutaragi, is stepping down as chief executive of Sony's computer entertainment division.
Sony's PS3 faced a string of setbacks which caused delays to its launch.
The system faces fierce competition from Nintendo's Wii and Microsoft's Xbox 360 consoles.
Analysts said Mr Kutaragi's departure is an indication that Sony may not be satisfied with the initial success of the PS3.
Mr Kutaragi, 56, designed the original PlayStation, which was born out of his frustration from a cancelled deal for Sony to create a CD-Rom drive for Nintendo's Super Nintendo Entertainment System (Super NES).
It went on to become a key source of revenue for the Japanese icon since its 1994 launch, selling more than 100 million units.
Mr Kutaragi designed the follow-up PlayStation 2 which has also sold more than 100 million units, and the PSP portable console, also seen as tremendous successes.
But he was demoted from Sony's board of directors in a 2005 and replaced as head of consumer electronics.
He also gave up the day-to-day running of the games unit last year, as Sony incurred huge costs due to the investment in the PS3, the console that is considered by analysts as vital to the company's future.
US sales of Sony's PS3 have trailed behind Nintendo's Wii
"I am happy to graduate from Sony Computer Entertainment after introducing four platforms to the PlayStation family," said Mr Kutaragi.
"It has been an exciting experience to change the world of computer entertainment by marrying cutting edge technologies with creative minds from all over the world."
Sony chief Howard Stringer hailed Mr Kutaragi as "a powerful visionary and entrepreneur in one figure".
"Not only has he created a multi-billion dollar business for the Sony Group, he has brought the industry into a new dimension."
Sony shipped 1.84 million PS3s worldwide last year compared with 3.19 million sales of Nintendo's Wii in the same period.
Mr Kutaragi, who will become an honorary chairman of Sony Computer Entertainment, is being replaced by Kazuo Hirai, who is currently the unit's chief operation officer.