Sony: Hacking, Earthquake Cost $2 Billion
Sony says the March earthquake in Japan and the data breach in April will cost it about ¥164 billion ($2.0 billion) by the end of its next fiscal year.
The company released its first guess about the impact of the earthquake and the hacking that exposed the information of 77 million users of the PlayStation Network. The earthquake, the company says, will cause profits to be off by ¥150 billion ($1.8 billion) by the end of March 2012. Some impact will be felt -- about ¥26 billion ($317 million) -- when the company reports its earnings on March 26, but as the fiscal year was almost over when the quake struck the impact on 2011's results is much less.
The largest cost is from idling factories in Japan and rebuilding capacity in the wake of the quake. About ¥5 billion ($61 million) is loss of profit margins. The earthquake, known as the Great East Japan Earthquake or Tohoku Earthquake, killed 15,000 people and resulted in $300 billion in damage.
The impact of the data breach is about ¥14 billion ($171 million) and will show up in the next fiscal year's results, as it happened after March 31. Much of that is implementing better security systems and $1 million in insurance against losses if a customer's information is misused, though there have not been any reports of such misuse.
When the PlayStation Network was hacked in April, Sony had to take down the network for nearly a month to deal with the problem. The welcome back program includes free in-game downloads, 30 days of free access to PlayStation Plus, 30 days of free access to Qriocity's Music Unlimited, as well as free identity theft monitoring from Debix. All of this adds to the financial impact of the hacking.
Sony will provide more detail in its earnings call on Thursday.
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