After nearly a month of highly publicized service outages, on May 15 Sony’s PlayStation Network slowly rumbled back to life after suffering one of the most devastating hacker attacks ever experienced by a major, global e-commerce network.
According to Sony, the May 15 service restoration applied to the United States, Europe, Australia, New Zealand, and the Middle East. Service for customers based in Asia was scheduled to be restored by the end of May.
The trouble all started on April 20, just a couple of weeks after Sony had appointed Kazuo Hirai to be the CEO of its Sony Computer Entertainment group, which includes the popular PlayStation Network. On that day, the PlayStation Network suffered a major security breach initiated by anonymous hackers affecting 77 million users worldwide.
On April 21, Sony closed off the network while it endeavored to discover the true nature of the security breach, as well as determine if credit card information had been stolen. On April 23, Sony announced the breach to the public, a delay in notification that drew criticism from some quarters.
On April 26, Hirai assembled the Japanese media in Japan to unveil the company’s new tablet computers while the company struggled to repair the network damage behind the scenes. Then, on April 27, the company produced an exhaustive statement regarding the incident saying:
“We believe that an unauthorized person has obtained the following information that you provided: name, address (city, state, zip), country, email address, birthdate, PlayStation Network/Qriocity password and login, and handle/PSN online ID. It is also possible that your profile data, including purchase history and billing address (city, state, zip), and your PlayStation Network/Qriocity password security answers may have been obtained.”
In the wake of the breach, the company was faced with a class action lawsuit filed by American Kristopher Johns claiming that the company “failed to encrypt data and establish adequate firewalls to handle server intrusion contingency, failed to provide prompt and adequate warnings of security breaches, and unreasonably delayed in bringing the PSN service back on line.”
Meanwhile, in Tokyo Hirai addressed the Japanese media via an hour long press conference and fielded questions from reporters. Not long after, group CEO Howard Stringer stepped forward to address the matter with a short statement directed toward American customers.
Finally, on May 15, Hirai posted a video speech delivered from his office, in English, expressing his apologies for the data breach and detailing initiatives designed to protect consumers from identity theft. Presented with the charm Hirai has become known for, the video message afforded Hirai the opportunity to give customers and stockholders alike the chance to see what the new corporate face of Sony might look like (Hirai has been rumored to be the top candidate to one day succeed Stringer as the group CEO).
To be sure, having such a historic product glitch occur just after the tragic and horribly disruptive Great East Japan Earthquake was a true test of Hirai’s mettle. The disaster rocked Japan’s economy and has set some in the financial world to wondering if the damage to some of Japan’s corporate heavyweights will take a toll that lasts beyond 2011. Sony’s factories in the northeast were impacted by the disaster, and many games were either delayed or simply cancelled for various reasons.
Indeed, the recent international trend of opining on the fate of corporate Japan, affected by the earthquake, might have very well given the company pause before revealing the breach as it tried to assess and repair what it could before making public statements.
Another side effect of the PlayStation breach has been a move by many gaming fans to the rival Xbox 360 system and its accompanying online network. While no statistics have been cited by any gaming authority, anecdotally I can confirm much new interest via inquiries fielded by my own circle of tech experts, writers and consultants regarding the viability of switching to the Microsoft platform.
Launched back in 2001 in the U.S. and in 2002 in Japan, the original Xbox was carefully developed and launched by a special team within Microsoft and talked up by Bill Gates as a pivotal move for the company that had until then been known more for its conservative offerings in the business software world. Although the Xbox 360 is a comparative newcomer in the gaming space, in just a few short years the console and network has become not only competitive, but often the first choice ahead of longstanding gaming icons like Nintendo and Sony.
Much like the PC and Macintosh platforms wars of old, one of the primary factors consumers use to determine which console is the right fit for their gaming needs is the availability of various software titles. In its initial stages, Xbox 360 launched with a few strong titles, but was essentially no real match for the long developed catalogue of Sony’s PlayStation. But that is ancient history in terms of computing years, and now Xbox 360 boasts one of the richest gaming catalogues including titles such as “Beautiful Katamari,” “Gears of War 3,” “Halo: Reach,” “Dead or Alive 4,” and “Fable III.” And while the console has not been without its own share of ups and downs in the market place, at this point it reigns as the number one competitor to Sony’s veteran PlayStation console.
Although most savvy consumers will understand that any network can be breached by determined hackers, Sony’s temporary stumble may end up inadvertently benefitting Microsoft’s already robust Xbox 360 network as it welcomes hacker-weary Sony switchers.
Sony has a number of major decisions to make this year, and so far it seems to have fared well in the face of an ill-timed security breach. Nevertheless, its next steps in the coming months could very well determine the company’s fortunes for the foreseeable future.
