Into the Breach • Page 2

Sony's PSN security breach looks disastrous - but it's so much worse than that.

Right now there's a hearts and minds battle being joined over what the channels for the consumption of digital media - games, of course, but also music, movies, books and so on - will end up looking like. The really successful companies at the end of this battle will, of course, be those who can marshal impressive libraries of content to offer to users, ensuring that they don't have to shop elsewhere for the things they want to buy. Sony is well positioned to do this, thanks to having tentacles that delve deep into various different media businesses, and a strong history of building relationships between the consumer electronics space and media firms.

However, the second factor - and arguably the more important one - is the question of whether consumers trust your company to be the gatekeeper for their media purchases. Astute analysts have observed that the true value of companies like Amazon and Apple doesn't lie in the products they sell right now, but rather in the enormous number of consumers who have entrusted their credit card details to them - allowing them to buy media, commence subscriptions and so on without entering card details or personal information. The Kindle book you want is published by Random House, but you're buying it as an Amazon customer; the newspaper you're subscribing to is a News International property, but you're buying it as an Apple customer.

Sony wants to own you as a media consumer, and this week, it gave every media outlet on the planet a headline that says it's not competent to handle that role.

Similarly, Sony is keen to build up a huge library of customer information - the personal information and credit card details required to process purchases with a single tap of a button, enabling you to buy games, add-ons, DLC and various other media from a whole ecosystem of publishers and creators using Sony as your gatekeeper. It may seem like a subtle thing, but it's hugely important to the businesses involved - the company which "owns" the customer holds the dominant hand in the marketplace.

But "owning" the customer isn't an easy task, because it required a constant eye on the trust required for that relationship. That trust can be breached in many forms - abusing the relationship by misusing personal data is a common problem, for example. In the recent ruckus over Apple's subscription terms for magazines and newspapers on iTunes, the key factor wasn't the 30 per cent charge the company was levying. Rather, it was the fact that Apple wouldn't pass personal info about subscribers to the publishing companies - who presently enjoy a healthy revenue stream from hawking that personal information as a sales channel for other products. Great for the publishers, rubbish for their customers, and a breach of the implicit trust relationship between consumer and gatekeeper which Apple would not countenance.

Yet that kind of breach of trust pales in comparison to what Sony just did - or rather, didn't do, in that it clearly failed to pay the appropriate attention to the crown jewels of the PSN service, namely the database of customer information at its heart. Until this week, Sony was on the short list of firms I trusted to the same level as Amazon, Apple and their ilk with my personal and financial details. No longer - which doesn't mean I'll never buy anything from PSN again (although some people will definitely reach that conclusion), but rather that I won't ever trust them to hold details of one of my main credit or debit cards again.

Sound like a subtle problem? It's not. Sony, in the end, wants to be the trusted service from which all of your media content comes. It wants you to download music, stream movies, grab the latest games, make in-game purchases for DLC, buy books for your Sony Reader or Tablet - all using a single simple login that hooks into its customer database. It wants to own you as a media consumer, and this week, it gave every media outlet on the planet a headline that says it's not competent to handle that role.

As Sony's network team struggle to get the PSN service back online and limit the damage of this disaster, the company's executives face an even bigger headache. Apple has stolen a march in digital media distribution which now even threatens to impinge on Sony's gaming stronghold. Amazon is a huge force in ebooks, a growing force in music and almost certain to make a stab at the App space - including gaming - in the coming months. Microsoft has a superior online gaming service and a trusted brand, and is very likely to bring serious weight to bear in digital media, perhaps as a key thrust of its upcoming Windows 8 operating system. And Sony? Sony just put a dunce hat on its head and went to sit in the corner. When PSN comes back online, the long and difficult process of rebuilding consumer trust will only be beginning.

If you work in the games industry and want more views, and up-to-date news relevant to your business, read our sister website GamesIndustry.biz, where you can find this weekly editorial column as soon as it is posted.

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