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Quake and Hack Set Sony Back by US$3.1 Billion

Quake and Hack Set Sony Back by US$3.1 Billion

The year 2011 has not been kind to Sony and official figures related to earnings reflect that. The earthquakes that hit Japan caused significant damage to Sony's infrastructure as well as operational downtime. On top of that, the security breaches of the Playstation Network further cut into the revenue of the company. Back in February 2011, the company has forecast profits of US$857 million. Now near the end of the fiscal year that number has been flipped around to a loss of US$31.billion.

arstechnica.com - "Based on information currently available to Sony, our currently known costs associated with the unauthorized network access are estimated to be approximately 14 billion yen (US$171.4 million) the fiscal year ending March 13, 2012," Sony explained on a slide describing its losses. This does not include costs associated with lawsuits filed against the company, as the outcome of that litigation is hard to estimate for either side.

The company estimated a 17 billion yen (US$208.1 million) loss of operating income this year due to the recent earthquake, and Sony also described "incremental" losses, such as repair of structures and loss of inventory. "The impact of these expenses is approximately 11 billion yen (US$134.7 million); however, Sony has insurance policies which cover certain damages to fixed assets and inventories as well as the associated restoration costs, which are expected to offset almost all of these losses and expenses in the fiscal year ended March 31, 2011, as the recoveries from insurance claims are deemed probable."

The damage does not end there though. It is estimated that the natural disaster's impact on the fiscal year 2012 will be around US$1.84 billion. As of now, there are no cases pertaining to identity theft or credit card fraud related to the security breach of the PSN. If users do come forward and take Sony to court for damages regarding loss of personal and private data, the loss figures might go even higher.

You can read more on the story here.

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