News from the virtual world:

— GONE DADDY GONE: Ken Kutaragi is known as "the father of the PlayStation," but his youngest offspring — the struggling PlayStation 3 — has turned out to be a problem child.

The PS3's woes led Sony to shake up its video-game division in November, and now Kutaragi has announced he'll be retiring in June.

After June 19, Kutagari will be honorary chairman of the entertainment division and will serve as Sony Chief Executive Howard Stringer's senior technology adviser.

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Kazuo Hirai, who is now president and chief operating officer of the games division, will take over as Sony Computer Entertainment's chairman and group chief executive.

Kutaragi "has been considering this decision for some time," Sony Computer Entertainment America spokeswoman Kimberly Otzman said, but the PS3's sluggish sales have undoubtedly accelerated his departure.

Sony seems to have dealt with the issues that held up the console's launch, but now it needs to start delivering compelling, exclusive software that will drive gamers to buy the thing.

— WAITING FOR WII: Nintendo still doesn't have enough hardware to keep everyone happy. Those lines you saw at Best Buy (BBY) and Target (TGT) last Sunday were, believe it or not, made up mostly of people who are still trying to buy a Wii nearly six months after its debut.

Nintendo President Satoru Iwata apologized and promised that the company was increasing production.

"We must do our best to fix this abnormal lack of stock," he told reporters in Tokyo. "We have not been able to properly foresee demand."

The demand has taken just about everyone by surprise.

Nintendo has sold 5.84 million Wii consoles worldwide since November, compared with 1.84 million PS3s sold by Sony.

The handheld DS is also flying out of stores, with more than 40 million sold since its 2004 launch.

Overall, Nintendo's profits jumped 77 percent in the fiscal year that ended March 31.

— ELITE FORCE: Not everyone who was shopping this weekend was looking for a Wii. Some were trying to find the Xbox 360 Elite, which went on sale Sunday.

The buzz surrounding the Elite has been fairly low-key; its main features — HDMI output and a bigger hard drive — aren't so sexy that 360 owners will be compelled to upgrade immediately.

Instead, Microsoft has been pitching the sleek black box at gamers who don't already have a 360. And it remains to be seen how well the $480 Elite will sell.

Most of the stores I checked with on launch day told me they were sold out, but it was still easier to find an Elite than a Wii.

— TAP DANCING: For a few years now, developers have been talking about the promise of "episodic gaming," in which serialized adventures would be doled out in short chunks every few months.

With the final installment of the six-episode "Sam & Max" online now, Telltale Games and Turner Broadcasting System's GameTap network have delivered on that promise.

"Sticking to our release dates got people hooked," said GameTap general manager Stuart Snyder. "The audience kept building every month."

Original titles like "Sam & Max" and "Myst Online: Uru Live" have drawn players to the online service, which now hosts more than 800 classic electronic games.

GameTap will also be home to the premiere of Eidos' "Lara Croft Tomb Raider: Anniversary" on May 31 — the same day it's scheduled to arrive in retail stores.

GameTap is making a few other changes to entice more players to the site.

Beginning May 31, the service will soon be making more than 30 of its games — with advertising — available to anyone who visits the site.

Players who register online will get access to multiplayer games and the site's community features; those who fork over the $7-$10 per month subscription fee will get the entire library, without ads.

— NEW IN STORES: After you check out "Spider-Man 3" in theaters, you can bring the web-slinger home with Activision's (ATVI) video-game tie-in (for just about every system). ... A more obscure franchise, Toon Disney's "Legend of the Dragon," comes to the Wii, PlayStation 2 and PlayStation Portable via The Game Factory. ... Codemasters launches the jet-fighter simulator "Heatseeker" (Wii, PS2). ... UFO revives the classic block-breaking action of "Devilish" for the Nintendo DS.