What CRM lessons can we learn from Sony's PSN crisis?

It has been a nightmare three weeks for Sony. Not only has it had to contend with the financial implications of shutting down its PlayStation Network following a major security breach, but it has also had to face up to the reputational implications heralded by its much-criticised response to the hacker attack.

Sony has confirmed that up to 100 million online accounts could be impacted by the breach – with personal data from 24.6 million user accounts stolen in last month’s attack, and potentially data including credit card numbers also having been stolen from another 77 million PlayStation accounts.

Sony Computer Entertainment Inc is hoping that it will be able to fully restore its PlayStation Network by the end of May, having initially shut it down following the breach, a lockdown that has prohibited gamers worldwide from being linked into live play or upgrade and download games and other content.

But even if normal operations are to resume later this month, the question is whether the damage that has been done to Sony is irreparable. In particular, Sony has come under fire for its handling of the attack, having failed to notify consumers of the breach until April 26 despite the fact it had been investigating unusual activity since April 19.

"There is a saying – often cited to the first Blair government that if a story remains in the press for over 11 days then there is permanent damage done. The situation with Sony may not rest on a political scandal, but it is a story that will not go away," says Richard Merrin, MD at Spreckley Partners (PR) in London. 
 
"The question therefore is why? And that has to be down to the initial way the company responded to the incident, or more accurately the way it did not respond. And this is the reason behind the damage to its brand. It appears to the outside world that it kept quiet for over 10 days. Was this down to corporate culture? To a belief that the issue would go away? That it was not deemed serious enough? Or was it in fact as a direct result of the tragic events of the recent Tsunami and a real desire not to heap more problems onto Japanese industry? Either way we may never know, but the damage has been done."

Chris Clarke, co-founder and managing director of Epoch PR agrees that the crisis seems extraordinary for Sony. "From its humble beginnings back in 1949, Sony has developed an incredibly strong and robust reputation built on understanding what customers want, product and service innovation and quality. Sony’s track record is strong enough to emerge from many types of issues. However, this issue could be different," he says.

"It would appear that one of the most damaging aspects of this recent incident is the way it’s been handled. I believe their reputation will suffer specifically amongst the video gaming community – especially gaming enthusiasts such as hard core and pro gamers. One of the unique characteristics of the gaming community is that it’s global, classic Generation X, not especially brand loyal and very active in social media networks. Given the average age for a gamer is 35, people who have been playing since childhood the first arcade, console and home computer games continue playing now on current systems, they are more likely to be incensed and motivated to express their frustrations publicly."