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Sony reports $3.2B annual loss, $171M spent on fixing PSN problems

Sony isn't likely to look back on 2011 with the fondest of memories, and neither will its investors after today's news that the recent earthquake in Japan and ongoing PSN woes have resulted in an estimated loss of $3.2 billion for the fiscal year ending March 2011.

According to its revised earnings forecast, Sony's loss is largely attributed to a $4.4 billion writeoff, and the earthquake in Japan this past March which cost the company (and many others) a sizable chunk of change due to hampered manufacturing operations. Interestingly, the report also stated PSN outages have cost the company an estimated $171 million in expenses, including network security enhancements, legal and expert fees, 'welcome back' programs, free consumer identity protection coverage plans, customer service investments and predicted revenue losses.

"These amounts are our reasonable assumption based on the information currently available to Sony. So far, we have not received any confirmed reports of customer identity theft issues, nor confirmed any misuse of credit cards from the cyber-attack. Those are key variables, and if that changes, the costs could change," read the report. "In addition, in connection with the data breach, class action lawsuits have been filed against Sony and certain of its subsidiaries and regulatory inquiries have begun; however, those are all at a preliminary stage, so we are not able to include the possible outcome of any of them in our results forecast for the fiscal year ending March 2012 at this moment."

Despite taking a few licks in recent months, Sony said it is still on track to end the 2011 fiscal year in a healthy position. It will reveal its full earnings report to investors this Thursday.

[Source: Forbes.comWall Street Journal]

May 23, 2011

Topics

Sony

7 comments

  • kachigop - May 24, 2011 12:07 a.m.

    Well at least we know that Sony went the distance with this whole restructuring of the security systems. Must have been quite the overhaul at that price. As for me, I'll happily take my "Welcome Back Package" in response to a relaxing month of campaign modes.
  • UberNoob - May 23, 2011 11:52 p.m.

    Wow...thats gotta hurt for Sony.
  • BALLSTOTHEWALLET - May 23, 2011 10:17 p.m.

    Ouch.
  • Ilyere - May 23, 2011 9:46 p.m.

    Oh dear, that's such a huge amount in such little time. I hope the next year works better for them.
  • dphoenix192 - May 23, 2011 8:36 p.m.

    Sony just doesn't have any luck this generation. I figured that they would lose a billion from the PSN fiasco, but hearing that they lost $3.2 billion is a little unexpected. I don't quite know how a tax writeoff works and how that factors into the loss. Anybody care to explain?
  • BigLandoz - May 23, 2011 8:34 p.m.

    Good God Sony. That's just brutal.
  • ChrisCultista - May 23, 2011 8:14 p.m.

    If Sony could drop into fourth place in the console wars, it would be there, now.

Showing 1-7 of 7 comments

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