Sony chief executive Howard Stringer shook up the ranks today with a management reorganization. He took over the president’s job held by Ryoji Chubachi and instituted other changes. The idea was to give Stringer more power to change things inside Sony, which is losing money and laying off a lot of people.

But Stringer has taken his top game executive, Kaz Hirai, and given him a promotion so he oversees not only the PlayStation business but also the Walkman business, Sony Media Software and Services, and the Sony Vaio business (that is, Hirai will be the boss of Kunimasa Suzuki, who runs Vaio).

As executive vice president of the new Networked Products and Services Group, Hirai will continue in his role as head of Sony Computer Entertainment, or the games business. The idea seems to be to wipe out management layers and increase cooperation between Sony’s notorious warring divisions.

But Sony is walking on dangerous ground. In the past, former game chief Ken Kutaragi got a promotion that allowed him to manage a bunch of Sony divisions as well as games. Then Sony got into trouble, running into delays in the design and launch of the PlayStation 3. Sony went from first place in the games business to its current third place. Hirai stepped in after Kutaragi retired, but he hasn’t been able to change the situation.

It’s good to get executives cooperating with each other. But it’s worse to weigh down an executive with so many responsibilities that he or she doesn’t have time to focus on games. Microsoft has a similar problem, with Robbie Bach overseeing its Entertainment & Devices Group. But Bach can rely on Don Mattrick, who runs the game business on a global basis. And at the other extreme, Nintendo does nothing but games, with Satoru Iwata, a gamer and game developer himself, running the whole show. Perhaps it is no coincidence that Nintendo has the leadership of the game industry now.