Kotaku is reporting that SCEI Chief Technical Officer Izumi Kawanishi has been moved from SCEI to Sony Corporate. The rumor is that Kawanishi is upset at the 40gb PS3 because of the reduced features. They also say there was friction between him and Kaz Hirai since Kawanishi wanted that job.

http://kotaku.com/gaming/rumor/power-struggle-at-sony-computer-entertainment-319183.php 

*Laughs*

Even a Sony employee doesn't like the 40 gig.

I wonder how many of Sony's top officials in SCEI agree with the 40gb without BC

One can only imagine the arguments the may have had over it.

 I'll give you an idea.

Izumi:  おやおや、どのように後方互換性を削除してもらえません！あなたは、最低！

Kaz: リッジレーサー、リッジレーサー！

You know something's wrong when the guy with the *good* ideas is the one being kicked out. I thought Kutaragi's "retirement" would increase the collective common sense of SCE execs.

LOL, I just barely remember my katakana well enough to figure out what Kaz said. ;)

(Yawn). It's an uncredited rumor from Kotaku. Nothing against blogs, but Kotaku is not exactly a powerhouse of intrepid journalistic zeal.

Sony should thank its lucky stars it has Kaz Hirai. Sharp guy, and he's managed the price drops well. I strongly suspect he had something to do with rolling out the $399/399EUR model as fast as they did.

I think I'll start some rumors about the shenanigans in Nintendo's Flying Space Monkey Division. You didn't know about the Flying Space Monkey Division? Ah, therein lies the tale...

 Somebody's little sony fanboy heart was hurt from this news.  Hooray for getting angry for huge corporations that get some slightly negative and mostly unimportant news posted on an internet blog site.