Financial impact of PSN hack downplayed by analyst

Videogame industry financial analyst Michael Pachter calls the direct losses due to the PSN downtime "low impact" but the breach of trust a more serious issue.

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With the PlayStation Network (PSN) downtime looking like it will stretch at least two weeks before it's all said and done, and possibly longer, I reached out to Wedbush Securities managing director Michael Pachter for his thoughts on the potential financial fallout for Sony. Pachter estimates that PSN does something like $10 million a week in revenue, yielding around $3 million in gross profits. He termed the immediate loss of that revenue as a "low impact," financially.

The long term effects, though, could be another matter. "The more serious issue is a breach of trust, and some bad will because of the inconvenience," said Pachter. That too can be overcome, though, in his opinion. "If they offer some free stuff and continue to follow up, this will all be forgotten in a few months."

In all likelihood that will be the case. Should any of the potentially stolen data be put to ill-use, though, the stakes could dramatically change.

From The Chatty
  • reply
    April 26, 2011 4:30 PM

    Garnett Lee posted a new article, Financial impact of PSN hack downplayed by analyst.

    Videogame industry financial analyst Michael Pachter calls the direct losses due to the PSN downtime "low impact" but the breach of trust a more serious issue.

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      April 26, 2011 4:40 PM

      ...I reached out to Wedbush Securities managing director Michael Pachter for his thoughts...

      That was your first mistake.

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        April 26, 2011 4:51 PM

        ^^ why pachter and not a magic eight-ball or a ouija board, garnett?

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          April 26, 2011 6:00 PM

          At least the Eight Ball doesn't waste your time with a long-winded response that is still probably wrong.

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        April 27, 2011 6:46 AM

        ^^^ this

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      April 26, 2011 4:42 PM

      God, that Pachter guy is pretty much the world's best-paid PS3 fanboy.

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      April 26, 2011 4:48 PM

      * P A C H T E R ' D*

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        April 26, 2011 5:37 PM

        OMG, I laughed so hard when I saw this. You deserve a donut!

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      April 26, 2011 4:50 PM

      I don't even think my account had my CC tied to it. However, in the off chance that it was, and something happens to my account? 0 Sony products in the future. Security should be #1 in terms of prioritizing one's online services.

      I know they can't confirm if the hackers got our CC numbers or not - but even them not being able to KNOW that is incredibly upsetting. An unsecured online service or one on a system I've had to return 4 times now? >_

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      April 26, 2011 4:56 PM

      What is right more often? The Magic 8-ball or Michael Pachter?

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        April 26, 2011 6:15 PM

        Who is right more often? Michael Pachter or abrasion.

        My money is on Pachter.

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      April 26, 2011 4:59 PM

      No breach of trust here... fact is, this could have just as easily happened to Microsoft and Xbox Live... it's just the day and age we live in, stuff like this is going to happen... it wasn't but a month ago I got emails from multiple bank card companies saying my data could have been compromised... I still have those cards, and I'll still have my PSN account when this blows over.

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        April 26, 2011 5:05 PM

        See, the bank promptly told you when the ccs were compromised, did they not? Sony did not. I'd like to think MS would do the same as the banks rather than wait.

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          April 26, 2011 5:09 PM

          This is my take on it, too. I can't believe they waited as long as they did. That's fucked up.

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            April 26, 2011 5:11 PM

            * J A P A N ' D*? reminds me of TEPCO

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              April 26, 2011 6:10 PM

              I think you are right. Look at how they handle a real possible disaster. It could be a doomsday scenario or it could be minor but lets wait a week and see if we find out more before we frighten anyone.

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            April 26, 2011 6:18 PM

            Not to mention I'm sure you still had access to services.

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        April 26, 2011 6:30 PM

        We won't really know whether that's true until we know what actually happened. It's entirely possible this was due to Sony's negligence.

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        April 26, 2011 8:22 PM

        It's a huge breach of trust. I got the same email a few weeks ago about my info possibly being accessed. The company then came out on monday and said exactly what was compromised which was only my email address and no other personal information was.

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        April 27, 2011 3:11 AM

        Of course there's a fucking breach of trust, they promised to keep you data safe and failed to do so. It's the very definition of 'breach of trust'.

        Maybe it could have happened to Microsoft (or nintendo, or steam or EA or...) but it didn't.

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          April 27, 2011 3:58 PM

          Companies don't "promise", they write thousands of words in EULA docs... and to my knowledge, I've never seen the line in the PSN EULA that said "if you put your cc info on our network, there's a 100% guarantee it will never fall into the hands of a hacker."

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      April 26, 2011 5:02 PM

      Everything he says is complete bullshit, so please believe the opposite.

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      April 26, 2011 5:04 PM

      Everyone turning on Sony is a bad way to approach this... Any corporation regardless of the greatest of security can be hacked into.... (and it's been done) Lets hope they nail the (anon) guys who started this whole shit fire for no real cause... They obviously targeted user accounts to scare people, that's what Anon's been trying to do all along. What do they hope to succeed in doing, making the ps3 a worthless block so there's no games made for it anymore and the only option for console gaming is the wii and xbox????

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        April 26, 2011 5:11 PM

        ^ the nadir of this terrible thread

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        April 26, 2011 5:38 PM

        the goal is to troll. for the lulz.

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        April 26, 2011 10:37 PM

        Wow. Just... wow

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        April 26, 2011 10:42 PM

        I read this post in the voice (and pacing) of Dracula from Symphony of the Night.

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        April 27, 2011 1:44 AM

        Everytime I think I find the level of sanity on the internet the bar drops because of people like you.

        Damnit.

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        April 27, 2011 4:59 AM

        You should totally recall yourself.

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        April 27, 2011 6:45 AM

        Go back to 4chan.

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      April 26, 2011 5:59 PM

      Pachter? The bulging zit on my left ass cheek contains more insights on this subject than that twit.

      Also, your site's new layout sucks baboon ass.

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      April 26, 2011 6:18 PM

      Hes right, its not like everyone that owns the PS3 is going trade it in and never buy another Sony product, they will however at least for a short while distrust Sony.

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      April 26, 2011 6:21 PM

      How exactly are these "analysts" contributing to society? What exactly are they paid to do? What's the value of what they do?

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        April 26, 2011 6:33 PM

        They provide serious investors with projections on how well a business will do in the fiscal year. These investors then use that info to determine if/when/how much stock they'll buy/sell of those companies.

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          April 26, 2011 6:42 PM

          also these kinds of predictions always wind up in insurance actuarial calculations

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      April 26, 2011 6:50 PM

      Owns Sony stock.

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      April 26, 2011 8:28 PM

      Personally, I do not put my credit card number on my saved information from PSN account because I don't trust anyone to access to my PSN account expect for my buddies. I prefer to use PSN game card to redeem into my PSN account for a good reason.

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      April 26, 2011 8:32 PM

      That guy is a fucking douche

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      April 26, 2011 8:57 PM

      Pachter...

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      April 26, 2011 10:53 PM

      Since it took them a week isn't that grounds to sue them?

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        April 26, 2011 11:01 PM

        I was wondering how may lawsuits are going to come out of this, if anyones info is used fraudulently and your credit rating is destroyed. That stuff can take years to fix. What's Sony going to do, give you a free game, or a coupon.

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      April 27, 2011 2:23 AM

      Argh, wtf. Hadn't even heard about this until now. Just checked my CC account and seems ok, but now I'll have to worry about it for a good time, or get a new card, both of which are huge annoyances. And for me, this is a huge dent in Sonys rep. If you're running a service that requires personal information and CC information, the one fucking thing you're supposed to do right is security.

      "This could have happened to any company" is completely irrelevant in my book. It didn't. It happened to Sony. I've been using my CC online for years with dozens of services, and this is the first time that (as far as I know) my shit has been compromised. Sony might be a victim here as well, but they still failed to deliver on their part of the whole "yes, I'll give you my personal information and CC number if you keep it safe" -deal.

      And what the hell is up with waiting for a week before spitting out the news? I understand it might have taken them some time to verify the level of the breach, but they should have come out with a "might" version ASAP, instead of playing it safe in fears of losing reputation over nothing.

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