The End of Sony?

Lets go on a thought experiment.

Say you use a companies products, you've bought them in the stores, like your parents did and they worked well, had good quality and lasted forever.

Now the shopping market has and is evolving around you. You no longer need to see digitally created products in a shop, you can buy it online. Similarly with its more standardised hardware products, online outlets have become trusted enough with a tried and tested returns system that you can buy the expensive stuff online too.

Once again the market evolves (has a habit of doing that). The endless stream of digital products coming out makes it more economical to have these available in a form of subscriber service (Xbox Live Gold, Spotify Premium esque, Sky/Cable TV), which you pay with monthly for a small fee on your bank card.

The summary of the above few paragraphs is that your brand as a company is now as strong as your online presence. When hackers target you, it's generally because you've done something that really rubs up their ethics the wrong way, or you're prosecuting one of their own http://www.ibtimes.com/articles/154968/20110531/s…

I think this is the 3rd attack in the past few months that is costing Sony, according to their own numbers (so double and add 12) $170m operating profit. If these attacks persist, will that grow exponentially? Will people eventually distrust Sony enough to not buy from it online?

The more worrying thing for me in reading around these articles is this: "What's worse is that every bit of data we took wasn't encrypted. Sony stored over 1,000,000 passwords of its customers in plain text, which means it's just a matter of taking it."

This might seem innocuous, to you lot, but to me this screams a complete and blissful ignorance of the online market and technology. In the UK it is law to encrypt personal information.

Hackers aren't competition. They are an outlier in the capitalist business model, and are a huge cost to take on. Myspace famously sued the hacker that did quite a funny little hack on everyone's profile, while facebook offered their hacker a job. Are the older (suited) generation unaware of modern technology? Ironically it seems, for the first social network and one of the largest technology firms out there, yes.

Are these problems solvable? The suits way of doing this seems to be 1) find the biggest company in IT security, 2) pay them truckloads, 3) Be secure.

As the US military found out http://en.wikipedia.org/wiki/Gary_McKinnon (and i think the US DoD pays a few bucks a year on its Norton Antivirus) you can just buy this stuff. You simply cant compete against a hacker geek motivated by being told it cant be done.

What does Sony need to do? Cancel its claims against Hotz and pay him a few bucks for his inconvenience. Will it? Will it hell.