PSN outage will cost Sony $171.1 million, earthquake bill $1.8 billion

Sony reveals three-week PlayStation Network outage and massive natural disaster will cut deep into FY 2012 revenues; FY 2011 estimates revised downward.

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During the three-week PlayStation Network outage, various estimates of its cost to Sony were thrown around. Today, the company revealed what it believes will be the final bill it must pay over the outage: ¥14 billion, or $171.1 million. The cost will be incurred in Sony's current fiscal year, which ends on March 31, 2012.

Sony will take a big hit from the Great East Japan Earthquake during its current fiscal year.

Sony also gave an estimate for the losses it expects to incur as a result of the Great East Japan Earthquake of March 11, 2011, and the resulting tsunami. The massive natural disaster is expected to cost Sony a whopping ¥150 billion ($1.83 billion) during the 2012 fiscal year. For the fiscal year that ended March 31, 2011, the cost will be ¥17 billion ($207.8 million).

Sony will report the results from its 2011 fiscal year this Thursday, May 26. Today, it revised projections for those earnings downwards 0.3 percent to ¥7.18 trillion ($87.7 billion), with a net loss of ¥260 billion ($3.18 billion) expected for the full fiscal year. Previously, the company had predicted an annual net profit of ¥70 billion ($855 million) on revenues of 7.2 trillion ($88.0 billion). The shortcoming is a result of a ¥360 billion ($4.4 billion) charge related to deferred tax assets in Japan.

Discussion

322 comments
XanderZane
XanderZane

@CaptainHerlock said: @XanderZane Here's the thing to remember, Sony does not equal video games. That's what "gamers" always seem to forget, or at least they CHOOSE to forget. Sony is a much larger company than video games, but that's all gamers associate with them I don't know if you know this, but there's a little band that made some noise a number of years ago, you might have heard of them, they're called "The Beatles". Well guess who owns half of their music publishing? Yep, Sony Music. That's worth $1 BILLION alone. Sony also deals in television syndication (Jeopardy and Wheel of Fortune among others), film production, film and television distribution, and many other areas. They're distributing the next two 007 films and those make a TON of money worldwide, and they have a new Spider-Man movie in the works. I know this is primarily a game website, but you have to sometimes look at the bigger picture. And that picture isn't as bleak as gamers always want to believe it is ********************************************************* I know all about that, but we are talking about their gaming division. Their gaming division will definitely be in the RED at the rate they are going. I don't know how well their movie/tv, electronics, or anything else is really doing. They had been losing a lot of money with their electronics before Blu-Ray launched. Not sure how they are doing now.

texasjgc
texasjgc

@mrboone01 Your not very smart are you? Honda took a bailout (as well as other NON-American companies). Sony did NOT. They are both NOT American companies. You're the one who should think the next time you type. If your having trouble thinking, go to eBay and enter into the search box "Brain".

rb89
rb89

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Briantb_2008
Briantb_2008

Its to be expected with all of the things happing in Japan and to the PSN

maxwell97
maxwell97

@CaptainHerlock: Yes, I've heard of Lloyd's of London. I also know that business interruption insurance typically only pays out if lost business occurs due to damage to the property of the insured. Lost business due to damage to national infrastructure and general chaos, as in the case of the Japan earthquake, is probably not covered by their policies. Think of it this way - if you insure a shipment to your customer, you'll get a payout if there's a flood that washes away the truck. On the other hand, if the flood takes out a bridge and the truck can't get to its destination, you DON'T get a payout for the loss of the sale that WOULD have occurred if the truck got there. You should do a little research, it would make your trolling more effective.

riariases
riariases

@inferno394 Okay, we "believe" God will save us from death and you "believe" (you don't "know") that God won't. I was under the impression that no human being has been to every corner of the universe and knows everything. Since you know everything and all, mind telling me who's gonna win the NBA and NHL playoffs?

CaptainHerlock
CaptainHerlock

@XanderZane Here's the thing to remember, Sony does not equal video games. That's what "gamers" always seem to forget, or at least they CHOOSE to forget. Sony is a much larger company than video games, but that's all gamers associate with them I don't know if you know this, but there's a little band that made some noise a number of years ago, you might have heard of them, they're called "The Beatles". Well guess who owns half of their music publishing? Yep, Sony Music. That's worth $1 BILLION alone. Sony also deals in television syndication (Jeopardy and Wheel of Fortune among others), film production, film and television distribution, and many other areas. They're distributing the next two 007 films and those make a TON of money worldwide, and they have a new Spider-Man movie in the works. I know this is primarily a game website, but you have to sometimes look at the bigger picture. And that picture isn't as bleak as gamers always want to believe it is.

CaptainHerlock
CaptainHerlock

Dude, take a Xanax. Disclaimer: This post in no way condones or endorses abuse of prescription drugs. So there! But seriously bro, don't be such a gamer. Life is a garden. DIG IT!

inferno394
inferno394

@rb89 Actually, I feel sorry for you. No matter how much you pray, or whatever you "believe" is true, right, or wrong, death will still take you just like every human before you. You "believe" god will save you from death. I "know" he won't. You are not special. You bleed red just like everyone else. No bible, no magic god, no church, and no preacher you give your money to, will save you from death. Its simply, we live, we die. You didn't know your life before you were born and you won't know anything after wards. god didn't even keep his own son from death. Do you think he really cares if billions suffer and die? "we are all just bricks in a wall" Enjoy your life while you have it.

CaptainHerlock
CaptainHerlock

@maxwell97 What do you think insurance does? It covers you in case you lose revenue. Ever hear of a company called LLoyds of London? Oh wait, of course you haven't, you're a gamer. Lloyds of London is the largest insurance company in the world. If they can sell Angie Everheart (GIGGITY!) insurance to cover her legs, and no I'm not kidding, then Sony will most likely have an insurance policy to cover this. You don't get into a business like this without covering all your bases. Once again, gamers always go under the assumption that Sony is incompetent.

rb89
rb89

@riariases alrighty! most christian religions tithe.

riariases
riariases

@rb89 I'm seventh day adventist and they donate 10% of their monthly income as well.

RGDT021
RGDT021

Earthquake Bill... what a sensational wrestling name!

IceJester45
IceJester45

Good. The data breach should hurt Sony. That'll teach them not to let it happen again. The earthquake damage is a different story, though.

XanderZane
XanderZane

Looks like Sony will be in the red in 2011. $1.8 billion is fiscal year losses is not a good thing. The earthquake and network issue really was a double-whammy on Sony. All the profit they got from the PS3 is pretty much out the door.

TwistyMcFisty
TwistyMcFisty

Sony-Ericsson's Canada site was hacked yesterday. Enough already, I really hope they catch the hacking pricks responsible and make them suffer a gruesome violation. Or kill them, either way, an example must be made.

immortal224
immortal224

If SONY doesnt exist Playstation doesnt exist, If Playstation doesnt exist, Xbox does NOT exist, too. Trust me...

immortal224
immortal224

I see some Xfans show their true nature, many people are die and they are happy, Ok, thats normal cause finally they have something to proud...

rb89
rb89

@inferno394 I feel sorry for you, man.....

rb89
rb89

@riariases May I add to your statistics another Christian religion? The Church of Jesus Christ of Latter-day Saints. Every member pays tithing, 10% of their income annually. Although I do not know the exact numbers concerning average amount tithed by the population of the members of the church who are full tithe payers, I do believe that it may rank high on the list there. Latter-day Saints pay tithing willingly and expect nothing in return. And this is just the bare minimum in donations.Saints fast at least once a month for two meals and give a fast offering to the church for those two meals (money they would have spent on food) and that money goes to helping the poor and less fortunate of God's children. Saints are also encouraged to give as much of their time, money and effort as possible to serving others as Christ did. In fact, members of this church are often the first to respond to disasters and give aid to those affected, most recently being in Japan and in Joplin, MO. When people think of The Church of Jesus Christ of Latter-day Saints, they often judge them as not being Christian. A Christian is one who believes in Jesus Christ. That is exactly what all Latter-day Saints are. Just an insightful addition to your statistics. Hope you gained something. Again, I am sorry I do not have the exact numbers. The population of the church, however, is approximately 14 million.

rb89
rb89

lol they obviously don't have a plan for disaster! One thing about emergency preparedness is prevention! If you run a multi-billion dollar corporation and don't have air-tight, up-to-date security instead of a shabby, "Bush-league hackable" network for your millions of online consumers, then you are an idiot! This is why Sony is in the crapper! Someone exploited their soft hardware, software and online infrastructures, and Sony sued the pants off of him for something that was easily preventable by throwing money down on security from the get go. This pissed him and other hackers off, so what did they do? They hit Sony HARD and made them pay for their idiocy. And pay they did. I like some Sony products, such as audio products like headphones and stereo systems, but they are just a bad company. I would not be surprised if these losses delayed the NGP, PS4 or anything else they have lined up to develop/release. Sony, you mess with the bull, you get the horns.

maxwell97
maxwell97

@CaptainHerlock: I really doubt they have insurance that covers over the lost revenue I'm sure damage to their facilities and such is covered, but that's a drop in the bucket. @sixgears2: I'm not happy about Sony losing revenue, but I don't think it's quite the disaster for the gaming industry you make it out to be. Keep in mind that this number is for the entire corporation, not just the gaming units. And, to be honest, it's not like Sony's capital has done much for gaming. Aside from God of War and Uncharted, their first-party lineup is meh - all the really good games come from third parties anyway. And the next hardware generation is years down the road.

CaptainHerlock
CaptainHerlock

Once again; does anyone in their right mind believe that a company as large as they are doesn't have insurance?

TeenGamer92
TeenGamer92

This is what happens when you piss off hackers and don't have a firewall XD (And also why I don't put any credit card info on my account) God I'd really hate to see Sony go under, because that wouldn't just extremely affect the gaming industry, but the entire market of products worldwide.

CaptainHerlock
CaptainHerlock

For those who say they hope Sony "will go under", do you honestly believe that a big company like this didn't have insurance? Or even a plan for "disaster"? Contrary to what gamers want to believe, Sony are not incompetent.

riariases
riariases

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ads_legend
ads_legend

I hope that Sony recover from this. And for all the people say 'I hope they go down in flames bla bla bla', you'd soon change your tune if you or a family member worked for them. Remember REAL people work for Sony with REAL lives and with the shortage of jobs the last thing you want is to lose yours.

Sigil-otaku
Sigil-otaku

@sixgears2 I'm sure most of the ones saying screw Sony wouldn't be Sony consumers and so nothing would really fall on there shoulders. I agree with you it's bad for the industry if you own a Sony console but your acting like it's going to effect everyone when it's not going to effect Nintendo and MS at all and gaming is hardly going to die even if Sony went under. I'm not hoping they do or anything but just saying.

ronnet
ronnet

This is good news for Sony's competition. Whether they be Microsoft and Nintendo or LG and Samsung. But Id like to remind the fanb... the highly loyal fans that they aren't Sony's competition. This is a big lose for the gaming industry, and that effects us all.

LightninLew
LightninLew

@EmperorSupreme The PS3 used to have the other OS option, but they took it away in an update, all he did was replace it. There is no difference between buying a PS3 and a PC, i paid a lot of money for it, and i should be able to do as i wish with it, i hate and want to get rid of the OS and the web browser. But for some stupid reason this is against the law, and sony will break my console if i do, seems fair.

sixgears2
sixgears2

$3.18 billion net loss in one year is really, really bad. All of you saying that you're glad Sony got screwed, I hope you realize that you're going to wind up feeling that loss as much as Sony. Less capital means less ability to publish or develop games for this generation, and a drop in available funds also could inhibit their ability to do R&D for next generation hardware. Beyond that, this could necessitate Sony charging you for things like PSN or multiplayer to help cover the shortfall. Laugh and crow all you want, this will eventually land squarely on the shoulder of the consumer. Enjoy.

jl0pez
jl0pez

I know Sony is working with the feds on this but I really do feel they need to have an assassin sent out for those that caused this. Knowing Sony they already have.

EmperorSupreme
EmperorSupreme

@LightninLew That's a lie... Yeah he pretty much broke the PS3 than distributed a how to; to all of his hacker buddies and it wasn't so they could "run Linux". That's like me hiring a hitman and saying, I didn't kill anyone myself. And there is a big difference between a Dell computer and a PS3. PS3 is a closed system, you bought it knowing it was a closed system. If you didn't want a closed system don't buy it. A lot of us enjoy the benefits that come from closed architecture.

immortal224
immortal224

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LightninLew
LightninLew

@EmperorSupreme do you know who GeoHotz is? he doesn't hack games, or crack consoles to play pirated games. He jailbroke the PS3 so it could run other OS, like linux. He did not allow it to play pirate games, or cheat/greif online. I am not defending game hackers or people who download illegal games or music etc. Once you buy a PS3 i think you should be able to do what you want with it, you don't see Dell selling a computer, and saying "if you try to put Linux on this, we will hunt you down, and violate you with the massive penis of the law." Why should a console be any different?

EmperorSupreme
EmperorSupreme

@LightninLew In one breath you defend Geohotz and illegal activity, in the second you are mad because Sony got hacked. Does that make any sense? You should be happy Sony is going after hackers. Hackers have proven all they want to do is pirate games, cheat / grief online and steal anything they can to potentially use to profit for themselves. None of that is good for the 99.9% of gamers who just want to relax when they get home and play some games without having to worry about it.

LightninLew
LightninLew

@immortal224 Yes, I am. And that is why i feel neglected, and sometimes betrayed as a customer when i hear about things like the Geohotz case, and Sony suing a man for selling a Japanese PSP in another country. Or when they give 70 million people's personal information, including mine, to hackers.

immortal224
immortal224

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EmperorSupreme
EmperorSupreme

@wolvklaw Your such a fanboy you want other people to pay online too? Wow.... And I could seriously care less about who makes money or who is losing money. Are you seeing more games because MS is making money? No Are you seeing new IP's because MS is making money? No As a gamer that's what I care about is games.

LightninLew
LightninLew

What's with all the love for Sony? They lost how many million people's personal information? Is it 70 million registered users or something dumb? With all these people giving them money they can't even look after our information? I for one couldn't give a crap if they go under, they are constantly suing people and companies for stupid things, and charging silly prices for hardware, (to be fair it is normally a good product) but after all this I really don't think it's worth the extra cost any more, Sony will have to do something really big to win me back, I wont be buying anything branded with their logo for a very long time.

spoonybard-hahs
spoonybard-hahs

@ bata619 Considering that they just pulled themselves out of the red not even two years ago, this is actually quite a gut-punch to Sony.

bata619
bata619

meh money is money but im sure this wont even be close to affecting sonys bank account given how manny zeros it probably has.

wolvklaw
wolvklaw

Better start charging for PSN. Your gimmick is costing you. But still gotta love the console wars...mine is free...ms sucks, sony rules!. Heh...sony is LOOSING MONEY...microsoft is making profit...winner is in the bank friends.

Neophyte555
Neophyte555

[This message was deleted at the request of a moderator or administrator]

dizzyrhino
dizzyrhino

[This message was deleted at the request of a moderator or administrator]

RO-nIn187
RO-nIn187

@chromeflamin who cares what a little prick 360 fanboy thinks? ps3 is still the best console... ms isnt hackproof either...

TheLastCamba
TheLastCamba

@Chromeflamin What the... What's all this hate against Sony? We all make mistakes... I like Sony products and PS3 exclusives are the best... it's a fact. Stop flaming and generating unwanted hate.

dizzyrhino
dizzyrhino

@CHROMEFLAMIN what the hell is your problem? You changed ur profile to an anti-Sony symbol now all you do is hang around here all day bashing Sony while praising the hackers. Why? Do you have some sort of invested interest in Sony failing, do you? Are you just mentally dysfunctional and can't survive out in the real world? Do you get a kick out of seeing hundreds of jobs lost all because of some pathetic hacker living out his mom's basement? Are you one of them too? I have to assume you are one of these hacker pricks because of how much you gloat for them, praise them, while all the while hitting down Sony. That's it, you hang around here to gloat about all the work you and your pathetic basement dwelling hacker friends are doing. That's it, you have to be a bloody hacker because no one other than someone with great invested interest in this would spend the time he does gloating over this. They'll find you and cut you down hacker scum.