PlayStation outage costs Sony $10m

Michael Carroll
29 Apr 2011

The PlayStation Network outage could cost Sony more than $20 million in lost business by the time services are restored, figures from a leading analyst firm suggest.

Informa Telecoms & Media estimates the outage cost Sony over $10 million in the first six days the PlayStation and Qriocity networks were offline. With Sony estimating it could take another week to restart all services the total financial penalty could easily be double that amount.

The figure doesn’t account for the loss of consumer confidence in Sony or its networks, analyst Andrew Ladbrook notes. He told TelecomAsia fixing the network’s security flaws will require a firmware update to the PS3 console – the third update to fix bugs in recent months. “The most notable came after the PS3 itself was hacked or unlocked.”

Sony will also be beefing up the security of its servers, but Ladbrook warns that the firm risks losing consumer confidence entirely if it gets the improvements wrong. “A third major outage due to hacking would begin to make it look like a real problem for the company.”

The firm hasn’t helped itself by being sluggish in contacting users. “It hardly looks like a company that is in control of the situation,” Ladbrook said.

While the Informa man doesn’t expect a mass migration of PlayStation Network users to rival Microsoft’s Xbox Live network, he said Sony’s problems won’t harm the image of rival networks.

“If anything it might reassure users of Xbox Live at how secure their service is despite a similar hacking incident in 2007. Users do not see the security of the services they used as interconnected. If one is compromised that does not necessarily mean it is possible that another will be. Rather they will view it as the PSN has been compromised and so its security is weak and all the others that have not must have strong security.”

Sony turned off the PlayStation Network and Qriocity service on April 19 following a cyber attack that has seen personal user details and possibly credit card details looted.

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