Where Sony Went Wrong

Sony’s reputation has taken a serious hit over the past few weeks, but much of the damage could have been avoided through proper PR management. I suspect the executives were running the show, while the PRs looked on in horror, as Sony blundered through every crisis management gaff in the book.

The first, second and third rules of crisis management are communication, communication and communication. It took Sony seven days to tell users their data had been compromised and 13 days for a full press conference and apology. On day 20 we found out that the hack had actually occurred on 16 April and then Sony lands the final bombshell – they knew that PSN had security flaws.

There are only so many times that your jaw can hit the floor in a three week period. Sony broke the cardinal rule at every stage in a triumphant performance of ‘how not to handle a disaster’.

In today’s age of social media, there is no excuse for a lack of communication with your customers. Of course, this security breach could have happened to any of the console manufacturers. It’s not the breach that’s the problem, it’s the way Sony handled (or didn’t) it.

Having spent 10 years in the PR industry, I know that transparency is key in a situation like this. Customers should be updated via blogs, Twitter, company forums and the like. It’s never a case of no news is good news. Silence just breeds frustration and resentment. It’s all very well being a friendly, corporate face when things are going well, but it’s when the faeces hit the fan that an organisation like Sony really needs to communicate with its customers. This is the best way to protect your reputation and manage customer expectations.

Sony’s lack of communication and deliberate withholding of information has crated a severe lack of trust and a loss of reputation. There have been reports of a spike in gamers trading in PS3s for Xbox 360s. Whether this is true or not, it’s not the kind of headlines I’d want to be reading, if I was Sony. However, in general, forum posts seem to suggest that most people waited less and less patiently, as the weeks went by, but waited nonetheless.

PSN gamers have been left feeling disgruntled and betrayed. Sony’s silence conveyed a lack of concern and even arrogance, which means some gamers have been voting with their wallets. Of course, Sony’s now announced its compensation package, which comprises two free games, from a selection of pretty old titles. The company is also offering 30 days free membership to PlayStation Plus, as well as a 12 month free identity protection programme. This is all well and good, but it stinks of too little too late for many.

But it’s not just gamers who are smarting after this incident. Developers are also counting the cost of the crisis, with one studio claiming it’s lost thousands of pounds and others worried about a drop in sales after PSN comes back online. Consumers may be reluctant to spend with Sony after the way it’s handled the situation, which will obviously hit sales. So Sony will be doing some seriously rebuilding of bridges with third-party publishers and PSN developers.

Parallels have been drawn between Sony and Toyota, when the car manufacturer received criticism for reacting slowly regarding safety recalls on its vehicles. Similarly, the lack of communication during the Fukushima nuclear plant incident has levelled criticism at a Japanese tendency towards information lockdowns in times of crisis. Both Google and Facebook opted for a hands up "my bad" approach to their data breaches, while BP sits firmly in the Sony and Toyota school of thought.

The point is, any of the major games companies could have come a cropper at the hands of hackers. Sony’s given us all a lesson in how not to do it. And if I was Microsoft, I’d be going through XBL’s security systems with a fine-tooth comb right now.

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