Finally, everybody has heard the news that Sony Corp has named Kazuo Hirai as new President and Chief Executive Officer, replacing Howard Stringer. Analysts believe, Sony is suffering through years of gaffes under CEO Howard Stringer. So, the company badly needed some change.

Interestingly, Stringer put a good face on the change, saying that his latest decision is the result of succession plans that began three years ago. Further he added, Hirai is the most suitable candidate for the post as he has distinguished himself through his work in the PlayStation and networked entertainment businesses.

Under Stringer's guidance, Sony has faced its financials slump, its major businesses, including the PlayStation and HDTVs lost market share, and major competitors take the lead in the mobile market.

Analysts added, Sony is planning a drastic restructuring under Hirai in an attempt to gain profits for the company. Let’s check out some significant reasons Why Sony needed to swap out its CEO: 

Sony’s Financial Decline

A CEO is always judged by its financial performance in a company, not by how friendly he/she is or how well he/ she is with its employees. If we judge Stringer on financial performance scale, he is found to be a big disappointment.

Reviewing last four fiscal years report, it is found that Sony’s revenue dwindles from 8.8 trillion yen ($115.6 billion) in 2007 to 7.1 trillion yen last year. During its 2008 fiscal year, the company posted a profit of 369 billion yen. Sony then lost 99 billion yen and 41 billion yen in 2009 and 2010, respectively, and a whopping 260 billion yen during its 2011 fiscal year.

All in all, Sony's shares have lost nearly 62 percent of their value over last five years. It is believed, Sony's current fiscal report will be similarly disappointing. According to first two quarter reports, the company has lost nearly 43 billion yen.

PlayStation brand 

When the first PlayStation launched over 15 years ago, it immediately grabbed limelight. It was then followed by PlayStation 2 in 2000 and PlayStation 3 in 2006. Surprisingly, in the same year (in 2006) Nintendo introduced Wii which soon became the top-selling console of its generation.

Users discarded PS3 as it was bulky, wildly expensive, and lacked the unique gameplay found in Nintendo’s Wii. As a result, gaming console which was once hugely profitable division for Sony, started making loses.  

HDTV Business

HDTV business is the most worrisome segment in Sony’s business line. To the reader’s surprise, Sony's television business posted its eighth-straight loss in 2011 as consumers started checking other alternatives from Vizio, Samsung and LG.

At the end of 2010, Sony owned just 10 percent of the U.S. LCD market, compared to 27.6 percent and 20.2 percent for Vizio and Samsung, respectively, stats revealed.  

The PlayStation Network Breach

Between April 17, 2011 and April 19, 2011, PlayStation Network outage occurred in which personal details from approximately 77 million accounts were stolen. Initially, it was believed that just basic information was lost, however soon after; it was revealed that credit card data was also stolen.  Sony admitted that hackers had forced their way into the company's servers to steal user’s information. 

Surprisingly, it was Hirai who stepped into the spotlight to initiate damage control, although Stringer was leading Sony at that time. Just weeks after one of the biggest data breach, Hirai revealed details on the methods the hackers employed. 

Finally, all these factors forced Sony to change its CEO. Let’s hope Sony will recoup its lost market repute under the guidance of new CEO Kazuo Hirai.