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Issue Date: Vol. 51, No. 5, May 2011, Posted On: 4/29/2011

PlayStation Network Is Hacked

Marcus Webb
Sony, Sony PlayStation, PlayStation Network, PlayStation hacker, Michael Pachter, Wedbush Morgan, video game

TOKYO -- Sony Corp. revealed earlier this week that a hacker stole information from 77 million player accounts in the company's PlayStation Network between April 17 and 19. Data might have included credit card numbers.

The network facilitates multiplayer home videogame play and movies. After discovering the security breach, Sony shut down the network on April 20. Officials say the network is expected to remain down until May 3, or longer.

Michael Pachter, an analyst at Wedbush Morgan, an expert in the videogame industry, estimated that Sony generates some $500 million in annual revenue from PSN sales of downloadable content.

Based on that figure, industry observers speculated that Sony could lose about $20 million in revenue during the two-week shutdown. Costs to make players whole in case of fraudulent credit card charges, plus free-play credits for lost network time, could run into the billions.

According to Forbes, a recent study by a leading data security firm said average hacker cost per person is $318 each, which would put Sony's cost for 77 million compromised accounts at more than $24 billion.

Sony said it is working to restore, maintain and strengthen the services, including incorporating additional countermeasures to ward against future intrusions.

The attack remains under investigation, Sony officials said. The company posted information in a FAQ document here.

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