Sony gamers threaten to leave after hack

LONDON/NEW YORK Thu Apr 28, 2011 2:49pm IST

A person plays a video game at a Sony Playstation in the Sony's flagship store in Berlin, April 27, 2011. REUTERS/Thomas Peter

A person plays a video game at a Sony Playstation in the Sony's flagship store in Berlin, April 27, 2011.

Credit: Reuters/Thomas Peter

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LONDON/NEW YORK (Reuters) - Loyal PlayStation gamers are threatening to ditch Sony Corp after it disclosed that personal information for some 77 million user accounts was stolen from its computer systems in one of the biggest-ever data breaches.

"People care very deeply about a data breach. More so than with other issues," said Larry Ponemon, chairman and founder of the Ponemon Institute. "When you get a letter telling you that your data has been lost or stolen, you get pretty ticked off with the company."

Security experts say that Sony needs to account for the loss of that business -- as well as damage to its brand -- when it tallies up the cost of dealing with the breach. Other costs include notifying customers of the attack and bringing in experts to cleanse its network.

Altogether, the breach may cost Sony more than $1.5 billion, or an average of $20 for each of the 77 million customers whose data was compromised, according to Ponemon, whose firm specializes in securing information on computer networks.

Shoppers at London video-games stores said they might leave the network, PSN, which allows them to play games with 77 million other members and buy games online, while some gamers writing in online forums called for a boycott of Sony products.

"You would just assume with someone like a Sony, your details would be safe," said Albert, a 42-year-old bank worker shopping for games in London's Canary Wharf financial district.

"As I was looking at the games just now I was thinking: Do I really want to spend my money with Sony?" he said, adding he would think again about using the network features in future.

BOON FOR MICROSOFT

Analysts said the hacking could steer people looking to buy a video game console toward Microsoft Corp's Xbox, which has its own popular online network. Enthusiasts who own both consoles will prefer to use their Xbox since right now it is the only way to play console games with friends over an online network, said MKM Partners analyst, Eric Handler. PSN is currently out of service.

"Microsoft should benefit because here's a reason to use Microsoft more than you use Sony," he said.

Doug, a 49-year-old composer shopping for Xbox games at a London store, said he was glad he had opted for Xbox over PlayStation.

"I'd cancel my cards this morning; wouldn't you?" he asked.

Sony warned earlier that unidentified hackers had stolen the personal details of its 77 million user accounts, in one of the biggest-ever Internet security break-ins.

The giant Japanese electronics company advised users, almost 90 percent of whom are based in Europe and the United States, to change any common passwords they also used for other services.

It said children with accounts established by their parents might have had their data exposed.

"If you think the gamers are pissed over at playstation blog, wait until the Mums get wind of this," wrote senior member barrybarryk on the PS3news.com online forum.

Sterne Agee analyst Arvind Bhatia said retail stores that sell prepaid cards and codes to download games, such as GameStop Corp, could benefit. Shoppers who still want to pay for online content but do not want to give up their credit card information could buy more of the cards. Bhatia said these items are already popular with parents who are not comfortable lending their children credit cards.

"You can go into the store and buy a card with a code and go home and use the points to buy a game on your console, and it makes the transaction safer," he said.

COLLATERAL DAMAGE

Ian Shepherd, chief executive of video-games retailer Game Group Plc, told Reuters that Sony's situation is "really serious."

"I think there are lessons for the whole industry from the experience that Sony are having," he said.

Gameloft, a France-based games company, said it is currently reviewing its security measures "to avoid encountering such problems on other networks."

While analysts say that video game publishers will not see a major impact on sales from the PSN network outage, some smaller companies could be hurt because some of their games are only available on the network.

"The data breach is indeed unfortunate as we launched 'Dungeon Hunter Alliance' two weeks ago exclusively on PSN and the game was selling very well," Gameloft's Chief Financial Officer Alexandre de Rochefort said in an email.

Sony pulled the plug on the network eight days ago but did not tell the public about the stolen data until Tuesday.

Abdul, a 20-year-old store assistant working in a branch of Game, said: "I just want it back up and running. That's what everybody wants."

(Additional reporting by Jim Finkle in Boston and Mark Potter in London; editing by Will Waterman, Gerald E. McCormick and Andre Grenon)

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