Sony: PSN security breach cleanup to cost $171 million

By on May 23, 2011, 12:56 PM

It's been a dire year for Sony with the combined disruption from the Japanese earthquake and the damage caused by the PSN hack. The company is due to release a financial report on Thursday, but on a preliminary financial update for its fiscal year 2010, which ended on March 31, Sony noted it now expects to post a $3.1 billion loss instead of the $857 million in profits forecasted back in February.

Most of the loss is due to charges associated with U.S. GAAP (generally accepted accounting practices) rules.

The earthquake and tsunami occurred just three weeks before the end of the financial year and thus didn't have a large impact on the company's global financial performance for fiscal 2010. According to reports, Sony estimates a ¥22 billion ($269 million) drop in sales and ¥17 billion ($208 million) in quake-related costs in the now-finished period.

Things aren't looking too hot for the next twelve months, though. For the fiscal year to end on March 31, 2012 the company expects profits to be off by a whopping ¥150 billion ($1.8 billion), most of it coming from idling factories in Japan and rebuilding capacity in the wake of the natural disaster that hit the country.

Having occurred in late April, the PlayStation Network attack and subsequent data theft fall outside the just-finished 2010 period, but the company nonetheless addressed the impact of the hack saying it will cost about ¥14 billion ($171 million) and show up in the next fiscal year's results. That figure contains all of the investigation, cleanup and insurance needed to resolve the issue, as well as the updates made to the network to prevent further occurrences, but it doesn't include costs associated with lawsuits made against the company, as the outcome is hard to predict.

Furthermore, those losses could become even larger if identify theft or credit card fraud is detected as a result of the PSN security breach -- which hasn't been the case so far. The company is expected to provide more details later this week. Despite the setbacks the company recently said it's still on track to launch the NGP later this year.




User Comments: 20

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Guest said:

$3.1B loss? BWAHAHAHA

GAME OVER.

Trillionsin Trillionsin said:

God... I have a feelings they arent even done yet. (the hacker/s)

BMfan BMfan said:

Everytime there's a Sony story all the ****** come out.

We know you hate Sony so much and i would too if they came into my house and killed my pets

but so far that hasn't happened.

So for once use a little bit of restraint

mattfrompa mattfrompa said:

On a positive note, I was able to get $100 off a 160 GB slim PS3 through Gamestop, MGS4 and GOW 1&2 used for a total of $250. I don't even care if PSN works anytime soon because I have plenty to keep me busy. oh, and I connected to my wireless network without spending extra money. Although the console is still packaged with a composite cable only...I have hdmi cables already, but come on :P

mattfrompa mattfrompa said:

also, that is a NEW slim PS3...

Guest said:

@BMfan: Aw, you're upset. We didn't mean to hurt your feelings, it's just that Sony deserves everything they got and then some.

ps. Sony sucks.

Supra Supra said:

A fraudulant order was made with my Amazon.com account over the weekend which was probably done by someone with access to the info that was stolen in the breach with Sony. My login info between the two happened to be the same and I hadn't used my Amazon account in a while.... Oddly the order was for a $14 printable gift card and it was charged to a credit card that was not mine. My account has been closed already and I now have to create a new one.

amstech amstech, TechSpot Enthusiast, said:

I don't think they realize how badly this is going to effect them.

Sony had a pricey but reliable/quality image to their products.

This is going to damage not just their image, but people's perception of them as a company...which could be the more dangerous of the two.

Guest said:

This is just a drop in the bucket for SONY...! Anonosoft has loss much much more than that with their RROD...E74... Overheating....Disc scratching....Jet-plane DVD sounded X-Box..!

Big Corp.. like SONY will make this back in a week... no biggi. So get back to bed SONY hating little kids an go sleep with your teddies.

Mantrhax Mantrhax said:

Time to change the consumer care politics Sony !!! time to change !!!!

Guest said:

@Guest 11:15 PM:

I doubt I'll get to hold my teddy very long. Sony stuck their nose where it didn't belong, so they're being taught a lesson.

Guest said:

@Guest

You think they'll make this back in a week? You best be trollin'. The loss is greater than their revenue for the entire quarter.

Maybe if they were a massive company like Samsung, then 3.1B would be "nothing" but for little sony?

Keep this up, and they won't even last till next year before they file for chapter 11.

treetops treetops said:

You know we can talk all the smack in the world about sony but if you don't like there practices simply don't buy there product. I for one would be sad if they went down. Xbox and nintendo need that healthy competition.

stewi0001 stewi0001 said:

In the long run, I think the hacking ordeal is going to do more fiscal damage than the earthquake. You can build more factories but when your reputation gets hit, that is more difficult to rebuild.

foreverzero89 said:

treetops said:

You know we can talk all the smack in the world about sony but if you don't like there practices simply don't buy there product. I for one would be sad if they went down. Xbox and nintendo need that healthy competition.

please go back to school. *facepalm.gif*

*their

9Nails, TechSpot Paladin, said:

You had to go and piss-off the hacker's didn't you Sony?

Vrmithrax Vrmithrax, TechSpot Paladin, said:

foreverzero89 said:

treetops said:

You know we can talk all the smack in the world about sony but if you don't like there practices simply don't buy there product. I for one would be sad if they went down. Xbox and nintendo need that healthy competition.

please go back to school. *facepalm.gif*

*their

THANK you!

I am often appalled at how often people mistakenly swap their, there and they're in posts and forums.

Technology pushes ever onward, but it seems that basic grammar and spelling skills are on a constant backslide these days.

Guest said:

@Vrmithrax: You live a very simple life if you are "appalled" by bad grammar in informal posts on the Internet. Your ignorance screams American. Roughly six percent of the world speaks English as their first language. Obviously that means most people you interact with Online are non-native English speakers.

Guest said:

Building a reputation takes a long time but it only tales a short period of time to lose it all.

It's getting desperate for Sony because they partnered with Rogers/AT&T (a cell-phone provider) to give away ps3s when activating 2 phones.

Guest said:

@Guest 3:23 PM: Sony can't sell their PS3s so they're just giving them away.

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