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Finance

Sony: PSN hack to cost approximately $170m

Mon 23 May 2011 10:53am GMT / 6:53am EDT / 3:53am PDT
FinancePublishing

Company also warns of FY11 full-year losses of $3.1bn

Sony Computer Entertainment

Sony Computer Entertainment is a Japanese videogame company specialising in a variety of areas in the...

playstation.com

Sony Corporation has warned that the PlayStation Network breach is to cost the company approximately 14 billion ($171.2m / 106.1m) by the end of the 2012 fiscal year.

The company was forced to close down its PSN online service last month after hackers compromised data of over 77 million user accounts. Later, Sony Online Entertainment's website was also hacked, bring the total number of breached gamer accounts to over 100 million.

"Based on information currently available to Sony, our current known costs associated with the unauthorised network access are estimated to be approximately 14 billion yen in the fiscal year ending March 31, 2012," the company told investors today.

Furthermore, Sony predicted a net loss for the entire 2011 financial year of 260 billion ($3.1 bn / 1.9bn) - compared to expectations in February that the company was on track to record a profit of 70 billion, blaming a write-off due to deferred tax assets.

For the full 2011 financial year Sony expects the Japanese earthquake and tsunami to wipe 17 billion from operating profits, and a further 150 billion from the fiscal year ending March 31, 2012.

Despite that, Sony said it anticipates a return to profitability in the 2012 financial year.

13 Comments

Graham Simpson Tea boy, Collins Stewart

219 7 0.0
Ouch. So next time it happens a career criminal will tell them they have the data and for a bargain of $85m they can have it back. Better to hush it up rather than spend another $170m....

Posted:3 years ago

#1
Umm, what? A $4bn turnaround primarily due to writing off deferred tax assets? That is a ultra-major writeoff - that can't be good for investors, knowing such a big change can be due to that. Currency related maybe, same thing Nintendo did (2?) quarters ago?

Posted:3 years ago

#2

Shaun Farol Studying Computer Information Systems, California Polytechnic State University

40 12 0.3
How do you quantify a loss in consumer confidence in your platform? Between that and the hardcore COD-head exodus that was reported last week there is bound to be more long lasting effects into the future.

Posted:3 years ago

#3

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.

2,270 2,439 1.1
That's correct, Michael. Currency exchange write offs can play hell with your financial reports (they can also bolster them) and that is why Nintendo was in the red 2 quarters ago. Nintendo actually had profit of $500 million profit that quarter.

This being a one time write off for Sony seems similar. Instead of being about a currency exchange write off, it's deferred tax assets. Sony should also report to investors the FY figures before the write off....unless that's still in the red. Knowing actual figures without the one time impact will give investors a better idea of the health of the company.

Posted:3 years ago

#4
It has not quite been the "Year of the Playstation" so far.

Posted:3 years ago

#5

Andrew Ihegbu Studying Bsc Commercial Music, University of Westminster

461 172 0.4
170m is a very small price to pay for a business as big as Sony. They could have lost 20 times that and still survived well. What they forget is the lost userbase from console migration, the reduced revenue that psn will generate due to lost confidence, and the alarming wake up call they should be getting after being shown for the second time that their security sucks!

Posted:3 years ago

#6
Andrew bad security if you build it a hacker will hack it, their is no security safe they let a guy use a ps3 to hack their goverment computer thats a WTF and so you say bad security I say no security is safe from a hacker so think before you say something

Edited 1 times. Last edit by Chester Taylor on 23rd May 2011 6:53pm

Posted:3 years ago

#7

Jake Clayton

54 0 0.0
Aye chester, a determined hacker with the right skills probly will get round anything eventually.

but not updating your firewall and server software is sucky security anyway you paint it, and to be honest, someone with a bit of knowledge could with a tutorial to hacking old server/firewall software could of probly pulled off this attack, which is a sorry state of affairs, truth be told.

Posted:3 years ago

#8

Jake Clayton

54 0 0.0
Aye chester, a determined hacker with the right skills probly will get round anything eventually.

but not updating your firewall and server software is sucky security anyway you paint it, and to be honest, someone with a bit of knowledge could with a tutorial to hacking old server/firewall software could of probly pulled off this attack, which is a sorry state of affairs, truth be told.

Posted:3 years ago

#9

Andrew Ihegbu Studying Bsc Commercial Music, University of Westminster

461 172 0.4
Chester, if that is the case then Sony have the worst luck in the world. I mean this, the Ps3 firmware, the PSP, So-Net ( http://www.asahi.com/english/TKY20110521... ).

All whilst MS and Nintendo still have impenetrable software.

And you're wrong, you can make a virtually impenetrable piece of software, you just end up spending huge amounts of CPU time encrypting and decrypting.

Posted:3 years ago

#10

Curt Sampson Sofware Developer

596 360 0.6
And you're wrong, you can make a virtually impenetrable piece of software, you just end up spending huge amounts of CPU time encrypting and decrypting.

No you can't. Encryption is only a small part of security and, while difficult, is not the most difficult part. The real challenge is to come up with a complete system that's hard to exploit from any location within it.

Posted:3 years ago

#11

Christopher Bowen Editor in Chief, Gaming Bus

453 724 1.6
All whilst MS and Nintendo still have impenetrable software.

Bwuh? So the Wii and 360 hacks from years upon years ago were figments of my imagination? And the entire business model of R4-like cartridges for the DS?

Posted:3 years ago

#12

Andrew Ihegbu Studying Bsc Commercial Music, University of Westminster

461 172 0.4
@ Christopher if you read closely, I used software for a reason. Without hardware modification, all current non-portable consoles from MS and nintendo cannot be easily circumvented. I was speaking more about flashing the software with replacement OS's etc like the X

The modern 360 is immune to the 'King Kong' hacks of today. I will admit that I had forgotten the R4 though.

Posted:3 years ago

#13

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