Sony hurt by response to PlayStation Network hacking

Just over a year since Toyota, Japan's best known car maker, was broadly slammed for appearing to withhold information on faults that prompted huge recalls, the country's most famous consumer electronics brand Sony appears to be making the same public relations mistakes.

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Last Updated: May 19, 2011

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The breach of its PlayStation gaming network, which Sony is blaming on spiteful hackers, is bad enough.

The attack has compromised names, addresses, dates of birth and other personal information of more than 100 million customers around the world, most in the US and Europe, and credit card details may also have been stolen.

But Sony upset users more by waiting a week before telling them about the cyberattack.

It also delayed an apology. Its chief executive, Howard Stringer, waited nearly two weeks before publicly saying sorry, a mistake his counterpart at Toyota, Akio Toyoda, made last year.

When it comes to technological prowess, Sony and Japan's other device makers can punch it out with the best, but in public relations it and many other Japanese conglomerates sometimes seem more like third-rate sluggers.

In the US, litigation-shy corporations generally understand the need to keep customers calm during a crisis, and the necessity of giving the public a reassuring face and an "I feel your pain" voice.

In Japan, where lawsuits are rare, the need to engage the general public has never been seen as critical.

Although vastly improved from a decade ago, corporate communications offices are still too often regarded by companies as a dumping ground for staff with nowhere else to go - a place where people are left for a couple of years and then kicked out.

The lack of Japan's PR gloss was evident in Tokyo Electric Power's response as a frightened public clamoured for information about radiation leaking from its tsunami-damaged reactors after the March 11 earthquake. For many, the suspicion the company was not telling the whole truth lingers.

The cost of poor PR, as Toyota found out last year, can run into billions of dollars. Despite eventually being exonerated from most of the blame related to faulty acceleration in its cars, the Japanese car giant had its US sales dip last year as the overall car market rebounded 11 per cent.

It will have to fight tooth and nail to win back its share in the world's most valuable car market.

Toyota, with about US$50 billion (Dh183.64bn) in cash and the leading products on offer, will probably bounce back, given enough time.

But for Sony, the public relations debacle comes as the company struggles to find a new direction as its brand fades. It has lost the music player market to Apple and is falling behind in computers, TVs and other devices.

Sony has trouble connecting the dots between units and divisions that do not speak to each other. It was the failure of hardware engineers to join forces with their software colleagues that let Apple steal the music player market away from Walkman. Apple now dominates the segment with a 70 per cent share.

The damage the data theft and Sony's bungled response has done to its PlayStation brand may be difficult to fix.

Attracting new customers to join its online gaming and movie downloads, a service that has become an important part of Mr Stringer's attempt to tunnel between Sony's silos, has overnight become that much harder.

Its late foray into tablet computers may also take a hit. With Samsung and others releasing their own machines to win a slice of a business created by Apple, Sony faces a crowded market place.

Its goal is to be the world's number two tablet maker by the end of the year, which it hoped to achieve by offering PlayStation games and other downloads to lure consumers away from the iPad. Its chance of achieving that now looks slim.

After nearly six years, Sony under Mr Stringer is slimmer and more cost-conscious, and the emergence of some hybrid products such as its PlayStation phone suggest at least the start of internal co-operation.

But the latest crisis to engulf the Japanese company suggests there is still a lot left for the chief executive and his successors to fix.

business@thenational.ae