Sony Sorry About Playstation Breach, Offers Freebies

Sony executives bowed in apology Sunday for a security breach in the PlayStation Network that caused the loss of personal data of some 77 million accounts on the online service.

Three executives, including Kazuo Hirai, the chief of Sony Corp.'s PlayStation video game unit, bowed for several seconds at Tokyo headquarters Sunday in the traditional style of a Japanese apology. It was their first public appearance since the worldwide problems surfaced in April.

Sony said account information, including names, birthdates, email addresses and log-in details, was compromised for players using its PlayStation Network. Hirai asked that all users change their passwords.

Sony said it would resume some PlayStation Network services this week, and added that it would offer "welcome back" freebies such as complimentary downloads and 30 days of free service around the world to show remorse and appreciation.

Sony also said that it would create the post of Chief Information Security Officer and put in place stronger data encryption measures to bolster its protection of user information.

"We apologize deeply for causing great unease and trouble to our users," said Hirai, the frontrunner to take over Sony's top job.

He said the FBI and other authorities had been contacted to start an investigation into what the company called "a criminal cyber attack" on Sony's data center in San Diego, Calif.

Hirai reiterated what the company said last week — that even though it had no direct evidence the data were even taken, it cannot rule out the possibility.

He said data from 10 million credit cards were believed to be involved, and that Sony still does not know whether information was stolen.

Anger
Sony's delay in announcing the theft sparked online anger from users and could push some to rival Nintendo's Wii and Microsoft's XBox gaming devices.

Before the briefing, Hirai issued a statement: "This criminal act against our network had a significant impact not only on our consumers but our entire industry. These illegal attacks obviously highlight the widespread problem with cyber-security.

"In addition, the organization has worked around the clock to bring these services back on line and are doing so only after we had verified increased levels of security across our networks," added Hirai.

Sony warned on Tuesday that hackers had stolen data from its online video game network, which produces an estimated $500 million in annual revenues.

The network, which serves both the PlayStation video game machines and Sony's Qriocity movie and music services, has been shut down since April 20. It is a system that links gamers worldwide in live play, and also allows users to upgrade and download games and other content.

Hirai said Sony suspected it was under attack by hackers starting April 17.

The infiltration disclosure came a week after Sony shut down the network. Executives made no mention of the crisis hours earlier the same day when they launched its first tablet computer.

The PlayStation Network breach at this point will not have an impact on Sony's planned launch of tablet PCs and its Next Generation Portable (NGP) portable games device, executives said Sunday.

The disclosure delay prompted anger among online users, although the company said it was due to a forensic investigation.

It could lead to legal action around the globe and pose a challenge for Hirai, who Sony CEO Howard Stringer has said is in pole position to succeed him.

In the United States, attorneys general, who act as consumer advocates, have begun investigating the matter or reviewing it with staff in several states, while U.S. regulators such as the Federal Trade Commission could get involved as well.

The chairman of the U.S. House of Representatives' Committee on Energy and Commerce, Mary Bono Mack, on Friday sent a letter to Hirai, who also serves as the chairman of Sony Computer Entertainment America, asking why the disclosure was delayed.

In Britain, a government watchdog launched an investigation of the incident.

Sony has been mulling a potential successor for Stringer, who has been vague about his plans from the next financial year that starts in April 2012.

Hirai, who was promoted in March to executive deputy president of Sony, used to run the firm's network products and services division including Sony's game businesses.

Sony said it had encrypted all credit card numbers, which would make it extremely difficult for hackers to access that data. But criminals might use other personal information that was not encrypted to launch scams.


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