Posted inTechnology

Sony CEO breaks silence over PlayStation scandal

Howard Stringer apologises to users; says customers should have been notified on breach earlier

Sony CEO Howard Stringer apologised to users of its PlayStation Network, breaking his silence on one of the biggest Internet security break-ins ever, but failing to provide a date when services would resume.

Stringer’s comments come after he faced criticism of his leadership since Sony revealed hackers had compromised the data of more than 100 million accounts.

Sony issued its first warning on the break-in a week after it detected a problem with the network on April 19, infuriating many PlayStation users around the world. Sony said it needed time to work out the extent of the damage.

“I know some believe we should have notified our customers earlier than we did. It’s a fair question,” Stringer said in comments posted on Sony’s US PlayStation blog.

“I wish we could have gotten the answers we needed sooner, but forensic analysis is a complex, time-consuming process. Hackers, after all, do their best to cover their tracks, and it took some time for our experts to find those tracks and begin to identify what personal information had – or had not – been taken.”

Credit card details of some 27,000 gamers in the Middle East may have been breached by thieves who hacked into the online gaming network.

A Dubai-based PlayStation spokesperson said the online gaming network had stored details of around 14,000 credit card holders in the UAE, 12,500 in Saudi Arabia and 500 in Kuwait.

Many gamers used pre-paid PSN cards rather than credit cards to access the service.

The online gaming network has 1,093,000 account holders in the Middle East with the majority – 650,000 – based in Saudi Arabia.

Sony previously said it would offer some free content, including 30 days of free membership to a premium service to existing users and in some regions pay credit card-renewal fees.

“I know this has been a frustrating time for all of you,” Stringer said. “To date, there is no confirmed evidence any credit card or personal information has been misused, and we continue to monitor the situation closely,” he said in a statement dated May 5.

Stringer said Sony would restore network services “in the coming days,” but gave no date.

“That’s all well and good, but when exactly is the PSN going to be back up? “Coming Days” could be tomorrow or it could be weeks from now,” a user called Morac said on the PlayStation blog.

Stringer also said the company had launched a data theft insurance policy for its PlayStation Network and Qriocity users.

Shares of Sony Corp has seen total losses of seven percent since it revealed the breach.

Sony’s revelation of a second Internet breach on Monday came just a day after it said measures had been put in place to avert another cyberattack like that which hit its PlayStation Network, leading to the theft of information on 77 million user accounts.

The Internet breaches sparked thousands of comments on the official PlayStation fan page on Facebook, some of them from users who said they would switch to Microsoft’s Xbox Live games network.

One analyst said security concerns could weigh on sales of Sony gadgets and hurt growth prospects for its network services.

“There is a real concern that trust in Sony’s business will decline,” Kota Ezawa, analyst at Citigroup Global Markets Japan, wrote in a note ahead of the comments from Stringer.

“The network business itself still only makes a small direct contribution to earnings, but we see a potential drop in hardware sales as a concern.”

Although video game hardware and software sales have declined globally, the PlayStation Network is a key initiative for the electronics company, which one analyst estimates brings in around $500 million (305 million pounds) in annual revenue.

Sony is looking to its insurers to help pay for its data breach, an amount that one expert estimates could exceed $2 billion, but others said insurers may balk at ponying up that kind of money.

“We have a variety of types of insurance that cover damages. Certain carriers have been put on notice,” said Sony spokesman Dan Race.

The hackers have not been identified, but Internet vigilante group Anonymous, which had claimed responsibility for previous attacks on Sony and other corporations, denied involvement.

The group’s statement came after Sony said Anonymous was indirectly responsible for the attack on the company.

Sony, which is set to report its annual earnings on May 26, has yet to specify the financial effect of the network breach.

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