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Bus 508 Assignment 4 Diversification






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Bus 508 Assignment 4 Diversification)
An Analysis of the PlayStation Network
An Analysis of the PlayStation Network
Sony Corporation is a well diversified company providing many
complementary products and services. Not only does Sony offer
electronics through its own website, it has a series of online products
and services it offers to its users. The PlayStation Network, a part of the
Sony Entertainment Network, is one of these many services. Through
the PlayStation Network, owners of Sony PlayStation products can play
games online with each other. Users can also purchase games and
additional items through the PlayStation Network. Credit card information
is stored in the network to be used for future purchases. Storing credit
card information allows users to make future purchases very quickly, and
possibly increases sales. However, its users entrust Sony to handle this
information with care. In April 2011, the Sony PlayStation Network had a
series of security breaches that not only compromised users’ login,
password, and personal information, but also their financial information
such as credit card numbers. The Sony PlayStation Network had to shut
down completely and did not return fully for over a month.
This paper will discuss the PlayStation Network and the recent security
breaches. Despite the fact that the PlayStation Network has over 77
million online users, the system was compromised and Sony was unable
to respond adequately to the problem. All companies can learn valuable
lessons from the 2011 Sony PlayStation Network breaches.
Network Within a Network
Sony Corporation, with origins dating back to 1946, was originally a
manufacturer of electronics. After creating the Sony PlayStation, a video
game console, Sony also began making and contracting with third
parties to make video games. Now that the newest console, PlayStation
3, incorporates an online component to most games as well. In order to
login to the PlayStation Network, users must choose a username and
password, and enter their full name and street address. Entering this
information simply allows users to access the network. The PlayStation
Network also allows users to download games and additional features
that are not accessible through other retailers. The network is a great

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complementary product for Sony, allowing users to easily download
products online directly from Sony through their console that they would
otherwise buy through a third party retailer. However, in order to
purchase things through the PlayStation Network, users must enter
credit card and billing information. The network stores this data for later
uses, which makes repeat purchases much easier.
Marketing Strategies
For consumers who use the PlayStation Network, the user’s information
is collected and stored for later use. Marketing while utilizing the
PlayStation Network can then be based on the preferences and usage of
the individual user. This strategy allows Sony to target PlayStation users
with products and services that they are more likely to purchase.
Sony places the PlayStation logo on all video games that are compatible
with the product. Some games are specifically marketed with “for
PlayStation” at the end of the game’s title. This strategy gets
PlayStation’s name repeated on websites multiple times, allowing
internet searches to pick up the name again and again. If Sony identifies
that a PlayStation is registered to a certain IP address, it is likely that the
internet marketing of PlayStation games will occur more often while
these users are online.
Many PlayStation users are on social media websites such as Facebook
or MySpace. If a Facebook user indicates that they “like” PlayStation,
that information is collected by Facebook. Sony and its affiliated video
game makers can then access the collected information to have their
advertisements repeated more often on those users’s pages. Facebook
can also collect information about the effectiveness of marketing to
PlayStation users in order to attract more advertisers that make products
compatible with the PlayStation consoles.
Illegal Intrusion
Sony has multiple networks, but the PlayStation Network has over 77
million users. In April 2011, Sony characterized a security breach as an
“illegal and unauthorized intrusion” of the Sony networks. In fact, there
was a series of breaches by different groups of hackers. The information
provided by registered users, including usernames, passwords, names,
and addresses, was compromised. In addition, the credit card
information of users who make online purchases may have been

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compromised. Sony did not announce this information until a week after
the last breech. The network was shut down after the last of the
A week after the last security breach, Sony announced to its PlayStation
Network users that certain information may have been compromised.
Many users were very upset because their personal and financial
information had been compromised for over a week and they were
unaware. There was a significant delay between when the card
information was compromised and when Sony notified its users. Many
users who did not give credit card information to Sony were still upset
because they use the same login and password for multiple sites, and
now their information on other sites may have been accessed without
their knowledge. After the breaches, Sony did not just patch the holes in
its network security, it had to rebuild from the ground up, further
upsetting users by causing the network to be down for over a month.
Lessons to Learn
The first thing companies should from the PlayStation Network breach is
to not cut corners on security. By aiming for higher profits, companies
are tempted to trim excess costs in every area. However, when are
dealing with consumer financial information, companies should always
have the best security in place. If consumers feel that they cannot trust
you with their financial information, they will not buy your products or
services—you cannot buy something online without giving out personal
financial information. Estimates place the cleanup costs in the range of
$200 million. It is much more expensive to lose customers and fix
security problems than it is to do it right the first time.
The second, and more universal, lesson to be learned is to be honest
with your customers. Companies make mistakes all the time, but
consumers are generally forgiving—especially if you provide a unique
product like the PlayStation Network. Most users were not upset about
the security breach; they were upset that Sony did not announce the
problem so users could take adequate measures to protect themselves
and their financial information. Companies may provide satisfactory
service, but it’s the trust and loyalty of consumers that keeps them using
your company’s product and not someone else’s.

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