PlayStation Network hacker attack to cost Sony $171 million
- From: NewsCore
- May 24, 2011
AS part of its revised earnings projections, published overnight, Sony said it estimates the April hacker attack on its PlayStation Network (PSN) will cost the company ¥14 billion, or $171 million.
The cyberattacks, which kept the PSN offline for 23 days, involved the theft of personal data that included names, passwords and addresses from more than 100 million accounts on the online service.
The estimated cost to Sony includes the personal information theft protection program it launched after the attacks, the "Welcome Back" program to compensate customers for the outage, customer support, network security enhancement, legal experts and the impact on profits due to a possible future revenue decrease.
"So far, we have not received any confirmed reports of customer identity theft issues, nor confirmed any misuse of credit cards from the cyber-attack," the company said.
"Those are key variables, and if that changes, the costs could change."
Class action lawsuits have also been filed against Sony and some of its subsidiaries.
"However, those are all at a preliminary stage, so we are not able to include the possible outcome of any of them in our results forecast for the fiscal year," the company said.
The costs will be incurred during Sony's current fiscal year, which ends on March 31, 2012. The company will report results for fiscal year 2011 this Thursday.
The projections aren't good for the electronics giant, which today warned investors it would run some $3.2 billion in the red, the second consecutive year it has made a loss after a 13-year run of profits.
The projection of a net loss for the fiscal year ended March 2011 was largely due to writing off $4.4 billion related to a tax credit booked in the fourth quarter.
The company had earlier projected a $860 million profit.
Like many other Japanese manufacturers, Sony has been hampered by the production disruptions set off by the March 11 earthquake and tsunami that killed more than 25,000 people, destroyed many factories and sent the nation's economic recovery into reverse.
Sony has seen plunging sales of flat-panel TVs and other gadgets, and was likely to remain in the red in its TV business for the seventh year straight.
Sony has also taken a beating in music players and other portable devices to Apple's iPod, iPhone and iPad.
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