Sony Isn't Safe Again
Oct 12th 2011 10:05AM
Updated Oct 12th 2011 10:18AM
Hackers apparently aren't ready to cut Sony (NYS: SNE) a break.
The Japanese consumer electronics and entertainment giant revealed that there has been another nefarious run at its online accounts. It feels that 93,000 of its Sony Entertainment Network, PlayStation Network, and Sony Online Entertainment users have been compromised in a massive account-cracking campaign.
"Given that the data tested against our network consisted of sign-in ID-password pairs, and that the overwhelming majority of the pairs resulted in failed matching attempts, it is likely the data came from another source and not from our Networks," Sony's chief information security officer writes last night.
In other words, don't blame Sony this time.
However, it doesn't really matter. All consumers see is that -- once again -- it's a hassle to maintain an online relationship with Sony. No credit card information was swiped, but 93,000 users now have had their accounts temporarily locked and a far greater number are rightfully fearful of what will happen next.
This will only benefit Microsoft (NAS: MSFT) and to a lesser extent Nintendo (OTC: NTDOY.PK), as PS3 owners once again have their loyalty challenged. Video game retailer GameStop (NYS: GME) -- which scores its juiciest profit margins on its lucrative trade-in business -- should also be a winner as Sony gamers trade in their gear to join the growing ranks of Xbox users.
Sony did the right thing when it was victimized by an even broader attack earlier this year, dishing out free games and credits. This still doesn't change consumer perception. Would you trust Sony's PlayStation Network with your personal information?
There's never a good time to be hacked, but this is a terrible time for Sony. It is a hot mess financially after posting putrid fiscal 2011 results and badly missing Wall Street's bottom-line targets in its two most recent quarters. More important, Sony is now just months away from releasing its already delayed Vita handheld gaming system. How successful do you think that rollout will be if hacking headlines continue to circulate?
A once-golden brand's reputation needs to be polished -- and soon.
If you want to see if the gaming giant can battle its way out of this mess, add Sony to My Watchlist to track news as it happens.
At the time this article was published The Motley Fool owns shares of Microsoft and GameStop. Motley Fool newsletter services have recommended buying shares of Microsoft and Nintendo; writing covered calls in GameStop; and creating a bull call spread position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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