Most PSN Users Have Come Back, But Financial Consequences for Sony Leadership

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Posted by patrickklepek (2212 posts) -
Did anyone really expect gamers would stay away from PSN for long?

For the most part, the PlayStation Network hacking is behind us. There are still lingering issues with the service in Japan, but most of the world has moved on, looking forward to betas for Uncharted 3 and Journey.

In fact, Bloomberg reports that Sony CEO Howard Stringer announced to shareholders this week that 90% of users have jumped back online to PSN since its return.

There have been consequences for Stringer and PlayStation leader Kaz Hirai, though.

Both had their salaries slashed, a move likely spurred from a combination of PSN's troubles and Sony's third straight annual loss. The most recent loss is actually Sony's greatest reported loss in 16 years.

Ouch.

Hirai has largely been expected to succeed Stringer as the head of Sony. It's been unclear whether the PSN incident will change that direction, but in March, Hirai was promoted to more than just PlayStation, tasked with revitalizing Sony's entire consumer electronics division.

#1 Posted by patrickklepek (2212 posts) -
Did anyone really expect gamers would stay away from PSN for long?

For the most part, the PlayStation Network hacking is behind us. There are still lingering issues with the service in Japan, but most of the world has moved on, looking forward to betas for Uncharted 3 and Journey.

In fact, Bloomberg reports that Sony CEO Howard Stringer announced to shareholders this week that 90% of users have jumped back online to PSN since its return.

There have been consequences for Stringer and PlayStation leader Kaz Hirai, though.

Both had their salaries slashed, a move likely spurred from a combination of PSN's troubles and Sony's third straight annual loss. The most recent loss is actually Sony's greatest reported loss in 16 years.

Ouch.

Hirai has largely been expected to succeed Stringer as the head of Sony. It's been unclear whether the PSN incident will change that direction, but in March, Hirai was promoted to more than just PlayStation, tasked with revitalizing Sony's entire consumer electronics division.

#2 Edited by potaties (6 posts) -

Not surprised, but yeah. "Ouch." is the best way to put something like that.

#3 Posted by Goldanas (550 posts) -

That bums me out, but it's tough times for all.

#4 Edited by Microshock (342 posts) -

Oh no, they'll have to order one less 30 pound lobster now. But hey, I feel for Sony, those hackers are pathetic losers with no life who need to try to prove ridiculous points. 

#5 Posted by Sinful (211 posts) -

:(

#6 Posted by Redbullet685 (6085 posts) -

Its good to see that 90% came back.

#7 Posted by rudyarr (270 posts) -

ouch..I feel for sony man. yeah they still have a lot of money but this whole hack thing was really bad publicity for them. I still love my PS3 :)

#8 Posted by mnzy (2925 posts) -
@Goldanas said:

That bums me out, but it's tough times for all.

Actually, economy is on the rise everywhere for a while now.
#9 Posted by dvorak (1497 posts) -

@Goldanas said:

That bums me out, but it's tough times for all.

You would think that wouldn't you.

#10 Posted by RE_Player1 (7526 posts) -

I think Kaz has to try to steer Sony in the right direction. Other than the Playstation brand and TVs I don't see Sony as a major consumer electronics company anymore.

#11 Posted by Claude (16254 posts) -

Remember when Sony was on top of the video game world. Yeah, good times.

#12 Posted by The_Nubster (2355 posts) -

This is certainly a sore spot for Sony, and one that's going to stick with them for a long time, regardless of which side the fault should fall. Hopefully Hirai doesn't lose what he's no doubt worked for for years and years, that would be rough, but the pay cut is no surprise. Sony's been having a tough time these past few years.

#13 Posted by patrick (563 posts) -

90% of accounts that were once already active, or 90% the number of accounts now being used as before it went down? There's a good number of people making throw away accounts to reap the Welcome Back benefits.

#14 Posted by crusader8463 (14428 posts) -

I want to come back, but my stupid PS3 YLOD on me the day PSN when back up. Gotta love the irony of that.

#15 Posted by Jazzycola (658 posts) -

Well it sucks that maybe the PSN had something to do with their salary cuts. But if it was purely based off of company performance overall, I'd say it was a good decision. If they were in the financial sector they'd be getting a pay raise for the company losing money. Good on Sony for making their higher ups accountable for company failures.

#16 Posted by BabyChooChoo (4806 posts) -

Oh boy, a Sony article! You know what that means? All the bad jokes you could desire! Yay!

Online
#17 Posted by CharlesSurge (126 posts) -

More details on the 90% thing would be interesting, but I don't think I'd be glad that only 9 out of 10 people have returned.

#18 Posted by TheSpartanDon (158 posts) -

Kinda sucks that Hirai and Stringer are being punished for something that was out of their control...but considering they're both millionaires, I doubt it'll hurt them much.

#19 Posted by rbanke (191 posts) -

"The most recent loss is actually Sony's greatest reported loss in 16 years."

Wasn't the majority of that loss because they paid the next several years taxes all upfront or something like that though?

#20 Edited by swfcfan (264 posts) -

@Claude said:

Remember when Sony was on top of the video game world. Yeah, good times.

Yeah. The problem for SCE is is that Sony corporation is forcing things onto it, like 3D to sell Sony Bravia TV's etc. The playstation brand was stronger when it was more independent from the parent company.

Also selling a $600 console was a bit dumb, even pre recession. Especially when there was a comparable and cheaper alternative already in the marketplace.

#21 Edited by VisariLoyalist (3000 posts) -

to those who don't know this is how japanese business works so its much less of a publicity stunt than you think. Traditionally the way japanese business is run and it may be changing, is that the "management" as they are called take a pay cut first than the supervisors and lastly the workers. In return the workers are extremely loyal and often work at a company their entire lives. It's very interesting.

#22 Posted by Beb (261 posts) -

I assume I would be counted in that 90% since I have logged on to PSN both to get the Welcome Back freebies as well as use Netflix.

What I haven't done is given PSN any money. Journey will be the first real test for me. Will I get it or will I abandon PSN exclusive content on principle? I don't know.

#23 Posted by Binman88 (3690 posts) -
@VisariLoyalist: That's a better way of doing it.
#24 Posted by misfit13b (27 posts) -

For the record, I didn't come back.

#25 Posted by Sparky_Buzzsaw (6395 posts) -

Glad management is taking the hit rather than the employees. We could take a lesson or two from that over here in the States.

Moderator
#26 Posted by lockwoodx (2479 posts) -

AT&T... enough said.

#27 Posted by Doppelgamer (245 posts) -

I really did give consideration to switching, but after extensive calculations, I found that it would cost me $600+ for a 360, controllers, and replacements for my games.   This would be just as expensive if I was switching the other direction.  (From 360 to PS3.)  It's just how things are.  All that software and hardware can really add up.

#28 Posted by BaconGames (3574 posts) -

Interesting that 1995 was the last year they had such financial troubles considering it was right after the launch of the original Playstation. Goes to show the legacy of losing on hardware for console makers and the huge investment Sony made with the original.

Online
#29 Posted by buft (3320 posts) -

I guarantee somewhere lower down the chain some of these financial cut backs are being felt too

#30 Posted by fenixREVOLUTION (735 posts) -

@Claude said:

Remember when Sony was on top of the video game world. Yeah, good times.

I miss those times.

#31 Posted by Jimbo (9988 posts) -

"Sir Howard’s pay cut covers his cash salary and bonuses for the financial year to March 31, which fell from Y408m ($5m) to Y345m [$4.3m]. His total reported compensation, including the theoretical value of stock options, rose slightly to Y863m [$10.6m], though Sony’s share price has fallen since the calculation date in November."

Slashed to ~$10m a year. Poor guy.

#32 Posted by Adus (68 posts) -

@patrick said:

90% of accounts that were once already active, or 90% the number of accounts now being used as before it went down? There's a good number of people making throw away accounts to reap the Welcome Back benefits.

This isn't how it works. Only accounts that were active before the hack can take advantage of the Welcome Back benefits.

#33 Posted by Duder_Me (299 posts) -
@Redbullet685: Why would 10% not come back is beyond me. I don't care if PSN got hacked, and I got some free schwag out of it! Plus, no one's credit info was used as reported. Hmmm....
#34 Edited by CatsAkimbo (644 posts) -

I still haven't gotten around to doing anything but changing my password on there, so I guess i'm part of the 10%.

Also, a huge corporation losing 10% of their customers is kind of a big deal. Imagine what taking a 10% paycut would do to your income.

#35 Posted by patrick (563 posts) -

@Adus said:

@patrick said:

90% of accounts that were once already active, or 90% the number of accounts now being used as before it went down? There's a good number of people making throw away accounts to reap the Welcome Back benefits.

This isn't how it works. Only accounts that were active before the hack can take advantage of the Welcome Back benefits.

Thanks for the clarification, just got that through the ether of the internet.

#36 Posted by TatsurouXIII (652 posts) -

fuck that I ain't going back.

#37 Posted by Glak (578 posts) -

Rough, but at least they're taking the hit

#38 Edited by HURRyDURRy (30 posts) -

I wonder when it will boil down to America vs. Japan again.

#39 Posted by blacklab (1597 posts) -

@rbanke said:

"The most recent loss is actually Sony's greatest reported loss in 16 years."

Wasn't the majority of that loss because they paid the next several years taxes all upfront or something like that though?

Sony has lost money three years straight. How could they possibly owe taxes?

#40 Posted by Saga (181 posts) -

I'm glad to hear that Sony uses a paid for performance approach.

#41 Posted by Anund (940 posts) -

@mnzy said:

@Goldanas said:

That bums me out, but it's tough times for all.

Actually, economy is on the rise everywhere for a while now.

Tell that to the Greek...

#42 Posted by Adziboy (702 posts) -

90% sounds like loads, but then you think about it this way: 
 
An entire 10% of people have not logged on and been active since the hacking. 10% of the entire online PS3 population. That's a very high number. If we assume that 10% will not be logging back on, then next year will be the biggest annual loss of those 17 years.

#43 Posted by MrAristocrates (194 posts) -
@Saga: As mentioned earlier, "pay-cuts for higher-ups" seems to be the norm in Japan. It is also vastly superior to our way of handling things.
#44 Posted by twillfast (574 posts) -

@Adziboy said:

90% sounds like loads, but then you think about it this way: An entire 10% of people have not logged on and been active since the hacking. 10% of the entire online PS3 population. That's a very high number. If we assume that 10% will not be logging back on, then next year will be the biggest annual loss of those 17 years.

People not logging onto PSN does not inherently mean they aren't buying and/or playing games on the PS3.

I'm also going to guess that the way they count PSN users is not necessarily by active users, but total users. I have two accounts, but one hasn't been logged on in about five months. If 90% of all PSN user accounts are actively used, that's not half-bad. But that number is probably pulled out of someones ass.

#45 Posted by CakeBomb (223 posts) -

Hey Kaz, make some Sony plasma tvs while you're at it! Led tvs suck!

#46 Posted by stillalive (19 posts) -
@Adziboy: I was just about to say the same thing. 10% of 77 million not coming back means the loss of several million customers. That's kind of a big deal to a company already not doing so hot financially.
#47 Posted by doejonathan (170 posts) -
@Adziboy: In an interview with Gamasutra, Jack Tretton said PSN traffic is at 90% of the pre-hack levels. Which is different from saying 10% of PS3 owners have not logged back in. Nonetheless, it's going to be an expensive year for Sony and time will tell how this will influence the consumer's choice in the next generation of consoles.
#48 Edited by Krakn3Dfx (2502 posts) -

@mnzy said:

@Goldanas said:

That bums me out, but it's tough times for all.

Actually, economy is on the rise everywhere for a while now.

Where's this at? I wouldn't call an economy where most states are still over 10% unemployment and having to cut billions per state in education an economy on the rise.

Plus Sony and most other Japanese companies are being heavily affected by the disasters there. I was at a Toyota lot this past weekend, and there are no new cars coming out of Japan right now according to dealers. If you look at the lots, it's all pre-owned stock.

Wall Street has been on the slide due to poor earnings reports, and the housing market is still a disaster that hasn't seen the worst of it.

Saying things are on the rise just for the sake of argument doesn't make it true.

#49 Posted by AndrewB (7689 posts) -

Until I can access my PSN profile from the web, it won't be "up" in my mind. I still have one of those free games to download, and can only do so when I have access to my account due to a screw-up in redeeming the free games.

#50 Posted by Krisgebis (222 posts) -

I think they had to use some serious number fudging to get to the 90% of users returning. Lets be honest, their 77mill users touting is bloated as hell. If they compare users on PSN now (minus new ones since the downtime) to the 77 mill I'm sure they don't get 90%.

Alot of those accounts are dummys, tester accounts, random made for friends coming over etc. Accounts that wouldn't be missed if they were never activated again.

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