Any Legal Issues Aside, PSN Outage Will Cost Sony


Many of us are expecting compensation from Sony for having to deal with about 2 weeks of no online gaming, but what many don’t realize is that the entity that will be most affected by the outage is Sony itself.

According to Wedbush Morgan analyst, Michael Pachter, the PSN brings Sony a total revenue of $10 million a week, $3 million of which is profit. Given that the sales will likely be halted for about two weeks, that alone costs Sony $20 million in revenue.

Now, keep in mind, that’s sales figures. Given the circumstances of the outage, consumer confidence in online purchasing will likely drop, causing a further decrease in revenue after the PSN comes back up. This trend, if it is going to happen, will likely continue for a few months from now.

But now you have to take into consideration the cost to have a third party security firm come in and investigate the whole mess. Forbes inquired a security firm, the Ponemon Institute, for how much it would cost to do such an investigation. The quote they got was a total of $318 per record for a data breach involving a criminal act.

Assuming Sony is paying a security firm that charges similar fees, each individual account will be a different record, and at $318 a piece, and about 77 million accounts, this, alone, will, theoretically, cost Sony about as much as $24.5 billion. Unless their security firm has a “purchase in bulk” discount, but I doubt Costco has such a business.

As for compensation, which many are expecting, especially those who have subscription-based services, Hulu+ users have already been given one week’s credit (and if the outage lasts a little longer, they might give two week’s worth). Sony Online Entertainment (Free Realms and DC Universe Online) is also going to compensate for lost time, including special events and other compensation (like, possibly, extension of subscription, etc).

From GI.biz


Written by: Jay - Community Manager / Editor-In-Chief


  1. #1 by dave on April 28th, 2011

    If its going to be that bad like you said assuming everything, I would count on it that Sony will find the person or group involved in this, they may get tips on who did it from other anonymous people that may know a little about this, if I did this I really dont know how I would feel about it, meaning will I get caught and or my 2 or 3 or 4 friends knew about this that I was planing on doing this for months, what if Sony puts up a reward for this for any tips on who did this and my friends may thank, you know this guy is an @#$hole lets tell Sony and get that big reward, Iam telling you right now I would be in the bathroom throwing up of worry and being paranoid and thanking man man what did I do and why did I do this etc… its a matter of time they will get a tip or find something somewere somehow, I thank I wouldnt be laughing about this if I did this right now, on the info. Sony been giving out on who they have and or what they have investigating this hack, people that hacks always leaves a little something behind to who may did this always, and as bad as this may seem Iam pretty sure the hackers left something out were Sony or their investigators will find, I read somewere lots of investigating companys that do hack work have X hackers that hacks for the good not bad and know what to look for.

  2. #2 by dave on April 28th, 2011

    I thank if I was Sony I would go back and talk to that hacker Geo Hotz not saying that he did it or anytning, but it seems like after he was not allowd to buy of touch a Sony product ever again, when was that? about a month ago? I thank so maybe a little longer but I read it here and on yahoo.com, so about a month later or a month and a half later this happens so it could be revenge for Geo , now Geo may know nothing about it, but thats a start and I would go right over to his house with FBI and talk to him, and if he knows anything he would be the one.

  3. #3 by Jason on April 28th, 2011 [ 27494 Points ]

    Majority of my older friends have sold all sony products. They have a valid reason. The security is a mess and Sony can not be trusted any more. This is simply to huge. I dont feel sorry for them. They protected themselves in terms of use as live and every other does but is that fair to the consumer?

  4. #4 by dave on April 28th, 2011

    @Jason

    I agree with you that Sony should have already had something on the PSN to cover this in case this kinda thang happens and it did, but to go and sell your ps3, the hackers already have want they need and want, but to be honest I dont thank they did this to get peoples info. etc… they did this cause they dont like Sony or Sony did something to them, like I said above your comment, now if Sony comes out and say to people hey hey listen this hack was ment to take your info. not to mess with us (Sony) but just to take ps3 owners info. then maybe I would look at this diffently, most of the time when hacks happen like this is cause they are not happy about whatever is going on with Sony or Amazion so they do this as a FU and hack in and cost the compeny millions or billions of dollars.

  5. #5 by dave on April 28th, 2011

    and yes Sony said peoples info. could be at risk, but didnt say hey this hack was ment to take your info. ruuuuuuuuuuun, now if they have it they wouldnt care about that anyway but again I could be wrong, I will rethank everything I said if it gets proving that they did this to get users info. but untill then I will assume they did this to F with Sony not us.

  6. #6 by Kane112 on April 29th, 2011 [ 32937 Points ]

    ahh poor sony too bad this couldve happened to any company. Well at least now i would expect sony to have the best security on the market right now.

  7. #7 by cz on April 29th, 2011

    lol at 24.5 billion. NO WAY IN HELL the figure is even remotely close to this.

  8. #8 by Zdog22203 on April 29th, 2011

    Sony is going to have a hard time getting out of this but I think they still are better than xbox. Keep faith in them and they give us free Internet.they have one of the best security so this can’t happen often. When will the online come on no idea.

  9. #9 by Zdog22203 on April 29th, 2011

    If they got that info were screwed!!! Still u could be right about just screw with Sony but maybe not. Sony better see what they took soon! The people who hacked it had to be pros cause it’s not easy.

  10. #10 by premiersoupir on April 29th, 2011 [ 17020 Points ]

    @#1: Yeah, it’d be nice to find the perps, but what good will that do Sony or anyone? If Sony came to me with open palm asking for millions, well, I’d laugh. And I tend to doubt that GeoHot has anything to do with this. For one, he just settled that suit with Sony, which ultimately worked out to be a pretty good deal for him, so I doubt that he’d endanger that now. Plus, GeoHot reverse engineers devices like the ps3 and iphone; he isn’t known for launching online attacks like this one.

  11. #11 by dave on April 29th, 2011

    @premiersoupir,
    yes I know Hotz doesnt have anything to do with this, like I said revenge for him, even if he knows are not or involved or not point is hackers liked him cause what he did in the past etc…

  12. #12 by Eddie on April 29th, 2011 [ 44542 Points ]

    It would help to catch the culprit to show that these types of people are not untouchable and that what they do does not come without consequences.

    Normally when this many accounts get taken, there is a substantial crumb trail. We shall see.

  13. #13 by Pedro on May 1st, 2011 [ 39949 Points ]

    I had seen this news, however we don’t know exactly why the costs are so high.

    This has certainly been worse for Sony than it has been for us, now the only thing we can do is wait and hope nothing worse comes out of this situation because of that.

  14. #14 by derigeur on May 5th, 2011

    From April 27th Update on PSN Blog – Sony’s words, not mine…

    “Q: When will the PlayStation Network and Qriocity be back online?
    A: Our employees have been working day and night to restore operations as quickly as possible, and we expect to have some services up and running within a week from yesterday. However, we want to be very clear that we will only restore operations when we are confident that the network is secure. ”

    So the network was to have been up by May 3rd at the latest making the outage just under 2 weeks long. Not one solid date has been provided since. This is nothing short of insane. Imagine any other product or service that you use so regularly, being unavailable for over two weeks?

    While an inferior piece of hardware, migrating to an inexpensive X-Box is looking mighty tempting to a lot of PS3 users looking for a better network.

    I can’t abide by having any sympathy for Sony in this case as it was 100% their responsibility to protect my user details, those of my children and and my credit card data. I do understand that it’s a big headache for them, but life is tough! When you take my money, you own the responsibility. Does anyone at Sony care about the costs that consumers and banks are going to incur to re-issue credit cards and the pay out of any fraud claims? Of course not. All claims of regret are likely genuine, but that’s not where the rubber meets the road. Regret does not equal responsibility, and responsibility is the one thing that Sony has yet to acknowledge. Rather pathetic for a world leading corporation.


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