• Let the Lawsuits Begin - Class Action Lawsuit Filed Against Sony Over PSN Hack

    Due to the PlayStation Network's recent security failure, it was only a matter of time before legal action came against Sony. Kristopher Johns, a local California man, strikes first in the legal arena by filing a class action lawsuit against the electronics conglomerate. The man appears to be taking Sony's breach of security extremely serious and is coming at them with a team of six lawyers from two separate law firms.

    Analysts across the industry have started estimating the potential cost of the recent PSN security breach. Micheal Pachter told Shacknews that in the week that PSN has been down, Sony has lost at least $10 million in revenue and $3 million in profits.

    Those direct losses are likely the least of Sony's woes though. Indirect losses from the lack of consumer trust and confidence in the system will likely cost much more. Legal compensation is another potential cost. The Ponemon Institute speaking to Forbes placed the average cost of a criminal data breach at $318 for each record lost. At 77 million registered users, that makes for a hefty sum of just under $24.5 billion, and that doesn't take into account any costs associated with regaining consumer trust.

    Hulu has already offered a free week of service in response to the downtime to subscribers, and Kotaku says that Sony has a range of special events and compensations planned this weekend for DC Universe Online and Free Realms. Who knows what Sony will need to do for compensation to gain consumer trust in the coming months.

    And of course there's the expense of making sure that this doesn't happen again such as security investigation costs as well as rebuilding the network. Sony has asked developers to install a new SDK with advanced security features during the downtime to keep history from repeating itself.

    This is a seriously expensive mistake for Sony, as is seen by the 5.2% drop in Sony's stock price since the breach.

    Source: PSGroove

    Comments 7 Comments
    1. megabyteme's Avatar
      megabyteme -
      Sony looks rather nice in her prom dress...
    1. nless00's Avatar
      nless00 -
      Sony, getting hammer. that what you get when u mess with hackers.
      I feel no sympathy for them.
    1. Vorx's Avatar
      Vorx -
      they sued geohot...what goes around comes around.
    1. Racehorse's Avatar
      Racehorse -
      SONY - you sell us machines then demand that we allow you to Boss and control what we do with
      them - serves you right !!!!! I hope you learn more than a 50 Billion Dollar lesson .

      I hope no user who's privacy and security was violated suffers Identity Theft ; because the consequences of that can be many years of difficulties.
    1. SonsOfLiberty's Avatar
      SonsOfLiberty -
      I don't think Sony will ever recover from this, along side the earthquakes in Japan that destroyed mot of their infastructure.
    1. mjmacky's Avatar
      mjmacky -
      Have to admit, if only for a fraction of a moment, I wish I owned a PS3 so I could get in on this lawsuit. But then rationality sets in and I'm so glad I'm not a Sony customer having personal information stolen. XBL has some of my financial details, so I'm glad MS isn't trancing around trying to piss people off.
    1. megabyteme's Avatar
      megabyteme -
      This does set a new precedent for consumer awareness- be careful who you support, or you could find your info being hacked.

      Sony DID deliberately spit in the face of consumers, then chose to bring attention to itself by bullying a hacker. They thought they were invincible. Turns out, they were just arrogant and became a prime target both in terms of David and GOLIATH, and a HUGE financial golden goose.

      This is obviously no longer just a bunch of kids playing around, and is in the hands of some VERY skilled players.