Sony estimates hack cost at $171M
by Steve Watts, May 23, 2011 10:30am PDTSony has revised its fiscal year forecasts today, accounting for recent market shifters like the network hacks and Japanese earthquake. "As of today, our current associated costs [related to the PSN/SOE hack] for the fiscal year ending March 2012 are estimated to be approximately 14 billion yen [$171.4 million*] on the consolidated operating income level," reads the investor call script. The estimated cost includes identity theft programs, the Welcome Back program, customer support, security improvements, legal experts, and revenue decreases.
The estimate warns that while it hasn't received any confirmed reports of identity theft or credit card fraud, those "key variables" could impact the costs. The company also isn't including the possible costs of the class action lawsuits, since the suits are so early and estimating the outcome would be difficult.
The impact of the Japanese earthquake is more severe, with Sony estimating a 150 billion yen ($1.83 billion) hit to operating income for FY2012, with an additional 17 billion yen ($208.1 million) in the fiscal year that ended in March. This is due to a new life insurance policy provision, decreased sales, and "idle facility costs at manufacturing sites." The latter point stands out, since Sony's Jack Tretton implied that the upcoming NGP may not launch in all territories this year due to quake damage -- a comment that was quickly denied by a Sony spokesperson.
Sony also has to repair some machinery, equipment, and buildings, totaling roughly 11 billion yen ($134.6 million), but expects almost all of the costs to be recovered by their insurance policies.
* currency exchange based on Google conversion at the time of publishing.
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Sony has revised its fiscal year forecasts today, including a $171 million hit to operating income from the PSN/SOE hacks, and $1.8 billion due to the Japanese earthquake.
Sony has revised its fiscal year forecasts today, including a $171 million hit to operating income from the PSN/SOE hacks, and $1.8 billion due to the Japanese earthquake. : Shacknews
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