Bloomberg News

Sony to Focus on Online Services Even After Hacker Attacks

June 28, 2011

(Updates with share performance in seventh paragraph.)

June 28 (Bloomberg) -- Sony Corp.’s online services will be a main source of growth for the company even after hacker attacks crippled its PlayStation Network, Chief Executive Officer Howard Stringer said.

Sony will also focus on networked devices and services, 3-D products and emerging markets, Stringer said at the company’s shareholders meeting today in Tokyo, where the electronics maker is based.

Stringer, 69, said Sony will strengthen network security and seek to regain customer trust after hackers forced the company to shut down its online entertainment services in April, a month after Japan’s strongest earthquake damaged the company’s factories. As many as 90 percent of PlayStation Network users have come back since services were restored, he said.

Sony fully resumed the PlayStation Network service and its Qriocity entertainment network in the U.S. and Europe earlier this month, after suspending it for more than five weeks. The company said it improved security after the intrusion, in which data on more than 100 million accounts was compromised.

Sony increased the number of firewalls between servers and added software to monitor intrusions and system vulnerabilities before restarting the services, according to the company.

Third Straight Loss

The company reported a third consecutive annual loss for the 12 months ended March 31, the first time that has happened since its listing in 1958, as the impact of the magnitude-9 earthquake on March 11 forced Sony to write down the value of deferred tax assets.

Sony’s shares have declined 30 percent this year, compared with a 5.4 percent drop for the benchmark Nikkei 225 Stock Average.

Sony, Japan’s biggest exporter of consumer electronics, will probably return to net income of 80 billion yen ($990 million) in the year ending March 31, the company said May 26.

The intrusion into the PlayStation Network may cost Sony 14 billion yen this fiscal year, it estimates.

Since the April cyber attack, Sony has said it is also investigating possible theft of data from its SonyPictures.com site, a Brazilian music entertainment website and Sony Computer Entertainment’s game operation.

--Editors: Terje Langeland, Suresh Seshadri.

To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net


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