Formation of Sony Computer Entertainment

At Sony Music, Kutaragi worked closely with Shigeo Maruyama, the CEO of Sony Music, and with Akira Sato to form Sony Computer Entertainment, Inc. (SCEI) on November 16, 1993.^[18] A building block of SCEI was its initial partnership with Sony Music which helped SCEI attract creative talent to the company as well as assist SCEI in manufacturing, marketing and producing discs, something that Sony Music had been doing with Music Discs. The final two key members of SCEI were Terry Tokunaka, the President of SCEI from Sony's headquarters, and Olaf Olafsson. Olafsson was CEO and president of New York based Sony Interactive Entertainment which was the mother company for the 1994-founded Sony Computer Entertainment of America (SCEA).

The PlayStation project, SCEI's first official project, was finally given the green light by Sony executives in 1993 after a few years of development. Also in 1993, Phil Harrison, who would later become President of Sony Computer Entertainment Worldwide Studios, was recruited into SCEI to attract developers and publishers to produce games for their new PlayStation platform.^[17]

After a demonstration of Sony's distribution plan as well as tech demos of its new console to game publishers and developers in a hotel in Tokyo in 1994, numerous developers began to approach PlayStation. Two of whom later became major partners were Electronic Arts in the West and Namco in Japan. One of the factors which attracted developers to the platform was the use of a 3D-capable, CD-ROM-based console which was much cheaper and easier to manufacture for in comparison to rival consoles from Sega and Nintendo which used cartridge systems. The project eventually hit Japanese stores in October 1994 and gained massive sales due to its lower price point than its competitor, the Sega Saturn. Popularity of the console spread after its release worldwide in North America and Europe.^[17]