Sony finally came clean, announcing that the Playstation Network is down because of an outside attack, and that the information of roughly 77 million users may or may not be compromised. They are emailing users whose information may have been put in jeopardy.
See my prior post on the issue for a full discussion of why Sony shouldn’t have put themselves in this position, and why it is closely related to them making the terrible legal decision to sue a user and reach too far into user privacy in the lawsuit. Now, the full costs of this mistake are beginning to take shape.
Venturebeat has an article making some guesses, though I suspect the author is relatively unfamiliar with the economics of the xbox live/PSN markets, because the guesses seem inaccurate. That article claims losses of up to $20 million for lost revenue from the downtime, but it also claims the PSN operates with a 30% profit margin, which it doesn’t (it was hoped to be profitable this year, for the first time ever… though obviously that’s out the window now). But ignoring that, my research estimated $2 million per day in revenue from the PSN, which would come out to something in the $26 million-ish range if it is down for another week.
More interesting was the estimate of what Sony could lose as a result of the user privacy compromise. One estimate apparently threw out the number $318 per user, which would put the loss in the $24 billion range. That seems pretty outrageous, and I feel like even $30 million would be high for that aspect, so who knows. And don’t forget that somebody has already filed a class action lawsuit against Sony for the outage: If they don’t fight it, that’s a pretty large class to settle with, and if they do, they likely spend nearly as much.
So, low end, Sony is losing $50-100 million, and high end, Sony loses more than $24 billion. All because they had to sue the guy who made a workaround for a feature they removed. Perhaps the biggest legal blunder a major video game company has made.
danielmarkmiller.net 