A woman runs on a floor advertisement for Sony Corp's PlayStation 3 game console in an electronic shop in Tokyo, April 27, 2011.
Credit: Reuters/Yuriko NakaoBy Isabel ReynoldsTOKYO | Sun 1 May 2011, 7: 06 am EDT
TOKYO (Reuters)-Sony said it would some services on the PlayStation Network this week resume and offer incentives to customers to try to prevent them turning to competitors after the theft of personal information belonging to 78 million user accounts.
Sony executives apologized for the violation of the large amounts of data at a press conference in Tokyo on Sunday, the first public comments by senior management to the crisis.
"We deeply apologize for causing great unrest and effort to our users," said Kazuo Hirai, Sony's number 2 and the frontrunner to succeed CEO Howard Stringer, bowing deeply three times during a lengthy press conference. Stringer was not at the event.
Many Playstation users around the world had been irked by the fact that the first warning of one of the largest Internet security burglary ever came a week after Sony a problem with the network on April 19, found.
The warning that user credit card information might be stolen also came just hours after Sony unveiled its first tablet computers at an event where executives made no mention of the Playstation violation.
Sun News led to thousands of comments on the official PlayStation fan page on Facebook, some of them from users who said they'd switch over to Microsoft's Xbox Live games network.
Sony said it would offer some free content, including 30 days of free membership to a premium service to existing users and in some regions credit card renewal fees.
It said compensation would only be paid if user damage. Sony has not work except to say that there is no evidence that credit card data was actually stolen. It has confirmed that the theft of names and addresses.
Since the violation, safety is improved on Sony's computer systems, the company said, adding that improve the level of data protection and encryption would be implemented. The u.s. Federal Bureau of Investigation had asked to probe the violation, Sony said.
"The negative impact on Sony is probably in the short term, but the industry as a whole will suffer a longer-term impact," said Kazutaka Oshima, President of Rakuten Investment Management.
"I think this will have an effect on Amazon and other e-commerce companies. Sony can had some security problems, but I don't think they had a particularly large hole. "
Peppered with questions about allegations that Sony was slow to inform users of the intrusion, a grim-faced Hirai said the company wanted first of all to know what kind of information can be stolen.
Hirai said he had known about the infiltration when he first tablet computers from Sony unveiled on 26 April.
"We made the announcement as soon as we can, which turned out to be the day after the launch," said Hirai, executive vice president of Sony.
The violation would be a big setback for Sony. Although video game hardware and software sales worldwide are down, the PlayStation Network is a key initiative for the electronics company, which an analyst estimates brings in about $ 500 million in annual revenue.
Hirai said Sony could not yet the effect on the profit, but at this point saw no effect on the launch timing for its new handheld games-device or tablets.
"This criminal act against our network had a significant impact not only on our consumers but our whole industry. Of course these illegal attacks point to the widespread problem with cyber-security, "Hirai said in a separate statement.
"Furthermore, the organisation has worked around the clock to these services back on line and do only after we had higher levels of security verified about our networks."
The incident has led to legal action and investigation by the authorities in North America and Europe, home to almost 90% of the users of the network, which allows gamers to download software and compete with other members.
Sony shares tumbled 4.5 percent on Thursday. Markets were closed on Friday.
It is unclear whether the Hirai explanation will convince users that the network is safe and investors that Sony's strategy of exploiting synergies between hardware and content via online services, which he has expanded with movies and music, is manageable.
Hirai told the news conference that Sony would continue to build its network-related companies as a key strategy for the company. Hirai was appointed the position of the No. 2 in March after a leading role in the development of the network.
Sony is the latest Japanese company to come under fire for disclosure is not bad news quickly.
Tokyo Electric Power Co. was criticized for covered how the nuclear crisis following the earthquake of 11 March. Last year, Toyota Motor Corp. was slammed for less than candid about problems about a massive vehicle recall.
(Additional reporting by Taiga Uranaka, Chikako Mogi and Mari Saito, editing by Anshuman Daga, Nathan Layne and Dean Yates)
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