Ken Kutaragi, known as the father of the Playstation video-game console, will take helm of a new venture between Sony and Namco Bandai as the firm's partner to battle rival game makers.
The Japan-based companies have invested slightly over $800 million to create a new game studio, called Cellius Inc. Namco Bandai will own 51 percent, and Sony owning the rest of the holdings.
The venture will begin on March 6, the firms said, with Kutargi serving as the new company's chairman.
Kutaragi became the chairman of Sony Corp on Dec 1, 2006, stepping down from his role as president. He is credited with turning Sony's consumer electronics division around with the highly profitable Playstation franchise.
Namco also has background in the video game industry, known for its hit titles Ridge Racer, Ace Combat, and wildly successful Tekken fighting games.
Cellius will take advantage of Cell Broadband Engine, to create games and content, the firms said.
Sony says it had sold 2 million of its advanced Playstation 3 game-systems as of the end of last week. This was weeks short of the companyâ€™s goal of 2 million by yearâ€™s end. However Sony claims that the PS3 reached the 2 million mark faster than earlier incarnations of the system, the PS and PS2.