Sony

Sony
Sony Corporation
ソニー株式会社
Type Public company
Traded as TYO: 6758
NYSESNE
Industry Conglomerate
Founded 7 May 1946[1]
Founder(s) Masaru Ibuka
Akio Morita
Headquarters Minato, Tokyo, Japan
Area served Worldwide
Key people Howard Stringer[1]
(Chairman, President & CEO)
Ryōji Chūbachi[2]
(Vice Chairman)
Kazuo Hirai[3]
(Executive Deputy President)
Masaru Kato[2]
(EVP & CFO)
Products Consumer electronics, telecommunications, communication & information equipment, semiconductor, electronic devices, battery, chemicals, PlayStation, films, television, music
Services Financial services, insurance, banking, credit finance and advertising agency
Revenue increase US$ 86.64 billion (2011)[4]
Operating income increase US$ 2.41 billion (2011)[4]
Net income decrease US$ -2.96 billion (2011)[4]
Total assets increase US$ 155.94 billion (2011)[4]
Total equity decrease US$ 30.74 billion (2011)[4]
Employees 168,200 (2011)[4]
Subsidiaries List of subsidiaries
Website Sony.net

Sony Corporation (ソニー株式会社 Sonī Kabushiki Gaisha?) (TYO: 6758, NYSESNE), commonly referred to as Sony, is a Japanese multinational conglomerate corporation headquartered in Minato, Tokyo, Japan and the world's fifth largest media conglomerate measured by revenues.[clarification needed].[4] Sony is one of the leading manufacturers of electronics products for the consumer and professional markets.[5]

Sony Corporation is the electronics business unit and the parent company of the Sony Group, which is engaged in business through its six operating segments – Consumer Products & Services Group (consumer electronics, game & network services), Professional, Device & Solutions Group (B2B products & services), Pictures, Music, Financial Services and Sony Ericsson.[6][7] These make Sony one of the most comprehensive entertainment companies in the world. Sony's principal business operations include Sony Corporation (Sony Electronics in the U.S.), Sony Pictures Entertainment, Sony Computer Entertainment, Sony Music Entertainment, Sony Ericsson, and Sony Financial. As a semiconductor maker, Sony is among the Worldwide Top 20 Semiconductor Sales Leaders.

The Sony Group (ソニー・グループ Sonī Gurūpu?) is a Japan-based corporate group primarily focused on the Electronics (such as AV/IT products & components), Game (such as PlayStation), Entertainment (such as motion pictures and music), and Financial Services (such as insurance and banking) sectors. The group consists of Sony Corporation (holding & electronics), Sony Computer Entertainment (game), Sony Pictures Entertainment (motion pictures), Sony Music Entertainment (music), Sony Financial Holdings (financial services) and others.

Its founders Akio Morita and Masaru Ibuka derived the name from sonus, the Latin word for sound, and also from the English slang word "sonny", since they considered themselves to be "sonny boys", a loan word into Japanese which in the early 1950s connoted smart and presentable young men.[5]

Contents

History

Masaru Ibuka, the co-founder of Sony

In late 1945, after the end of World War II, Masaru Ibuka started a radio repair shop in a bomb-damaged department store Shirokiya building in Nihonbashi of Tokyo. The next year, he was joined by his colleague, Akio Morita, and they founded a company called Tokyo Tsushin Kogyo K.K.,[8] (Tokyo Telecommunications Engineering Corporation). The company built Japan's first tape recorder, called the Type-G.[8] In the early 1950s, Ibuka traveled in the United States and heard about Bell Labs' invention of the transistor.[8] He convinced Bell to license the transistor technology to his Japanese company. While most American companies were researching the transistor for its military applications, Ibuka and Morita looked to apply it to communications. Although the American companies Regency Electronics and Texas Instruments built the first transistor radio as joint venture, it was Ibuka's company that made them commercially successful for the first time.

In August 1955, Tokyo Tsushin Kogyo released the Sony TR-55, Japan's first commercially produced transistor radio.[9] They followed up in December of the same year by releasing the Sony TR-72, a product that won favor both within Japan and in export markets, including Canada, Australia, the Netherlands and Germany. Featuring six transistors, push-pull output and greatly improved sound quality, the TR-72 continued to be a popular seller into the early sixties.

In May 1956, the company released the TR-6, which featured an innovative slim design and sound quality capable of rivaling portable tube radios. It was for the TR-6 that Sony first contracted "Atchan", a cartoon character created by Fuyuhiko Okabe, to become its advertising character. Now known as "Sony Boy", the character first appeared in a cartoon ad holding a TR-6 to his ear, but went on to represent the company in ads for a variety of products well into the mid-sixties.[8] The following year, 1957, Tokyo Tsushin Kogyo came out with the TR-63 model, then the smallest (112 × 71 × 32 mm) transistor radio in commercial production. It was a worldwide commercial success.[8]

University of Arizona professor Michael Brian Schiffer, PhD, says, "Sony was not first, but its transistor radio was the most successful. The TR-63 of 1957 cracked open the U.S. market and launched the new industry of consumer microelectronics." By the mid 1950s, American teens had begun buying portable transistor radios in huge numbers, helping to propel the fledgling industry from an estimated 100,000 units in 1955 to 5,000,000 units by the end of 1968.

Sony Group Headquartes at Sony City in Minato, Tokyo

Sony's headquarters moved to Minato, Tokyo from Shinagawa, Tokyo around the end of 2006.[10][11]

Origin of name

When Tokyo Tsushin Kogyo was looking for a romanized name to use to market themselves, they strongly considered using their initials, TTK. The primary reason they did not is that the railway company Tokyo Kyuko was known as TKK.[8] The company occasionally used the acronym "Totsuko" in Japan, but during his visit to the United States, Morita discovered that Americans had trouble pronouncing that name. Another early name that was tried out for a while was "Tokyo Teletech" until Morita discovered that there was an American company already using Teletech as a brand name.[12]

The name "Sony" was chosen for the brand as a mix of two words. One was the Latin word "Sonus", which is the root of sonic and sound, and the other was "Sonny", a familiar term used in 1950s America to call a boy.[5] The first Sony-branded product, the TR-55 transistor radio, appeared in 1955 but the company name did not change to Sony until January 1958.[13]

At the time of the change, it was extremely unusual for a Japanese company to use Roman letters to spell its name instead of writing it in kanji. The move was not without opposition: TTK's principal bank at the time, Mitsui, had strong feelings about the name. They pushed for a name such as Sony Electronic Industries, or Sony Teletech. Akio Morita was firm, however, as he did not want the company name tied to any particular industry. Eventually, both Ibuka and Mitsui Bank's chairman gave their approval.[8]

Formats and technologies

Sony has historically been notable for creating its own in-house standards for new recording and storage technologies, instead of adopting those of other manufacturers and standards bodies. The most infamous of these was the videotape format war of the early 1980s, when Sony marketed the Betamax system for video cassette recorders against the VHS format developed by JVC. In the end, VHS gained critical mass in the marketbase and became the worldwide standard for consumer VCRs and Sony adopted the format. While Betamax is for all practical purposes an obsolete format, a professional-oriented component video format called Betacam that was derived from Betamax is still used today, especially in the television industry, although far less so in recent years with the introduction of digital and high definition.

In 1968 Sony introduced the Trinitron brand name for its lines of aperture grille cathode ray tube televisions and (later) computer monitors. Trinitron displays are still produced, but only for markets such as Pakistan, Bangladesh and China. Sony discontinued the last Trinitron-based television set in the USA in early 2007. Trinitron computer monitors were discontinued in 2005.

Sony launched the Betamax videocassette recording format in 1975. In 1979 the Walkman brand was introduced, in the form of the world's first portable music player.

1982 saw the launch of Sony's professional Betacam videotape format and the collaborative Compact Disc (CD) format. In 1983 Sony introduced 90 mm micro diskettes (better known as 3.5-inch (89 mm) floppy disks), which it had developed at a time when there were 4" floppy disks and a lot of variations from different companies to replace the then on-going 5.25" floppy disks. Sony had great success and the format became dominant; 3.5" floppy disks gradually became obsolete as they were replaced by current media formats. In 1983 Sony launched the MSX, a home computer system, and introduced the world (with their counterpart Philips) to the Compact Disc (CD). In 1984 Sony launched the Discman series which extended their Walkman brand to portable CD products. In 1985 Sony launched their Handycam products and the Video8 format. Video8 and the follow-on hi-band Hi8 format became popular in the consumer camcorder market. In 1987 Sony launched the 4 mm DAT or Digital Audio Tape as a new digital audio tape standard.

In addition to developing consumer-based recording media, after the launch of the CD Sony began development of commercially based recording media. In 1986 they launched Write-Once optical discs (WO) and in 1988 launched Magneto-optical discs which were around 125MB size for the specific use of archival data storage.[14]

In the early 1990s two high-density optical storage standards were being developed: one was the MultiMedia Compact Disc (MMCD), backed by Philips and Sony, and the other was the Super Density disc (SD), supported by Toshiba and many others. Philips and Sony abandoned their MMCD format and agreed upon Toshiba's SD format with only one modification based on MMCD technology, viz EFMPlus. The unified disc format was called DVD which was marketed in 1997.

Sony introduced the MiniDisc format in 1993 as an alternative to Philips DCC or Digital Compact Cassette. Since the introduction of MiniDisc, Sony has attempted to promote its own audio compression technologies under the ATRAC brand, against the more widely used MP3. Until late 2004, Sony's Network Walkman line of digital portable music players did not support the MP3 de facto standard natively, although the provided software SonicStage would convert MP3 files into the ATRAC or ATRAC3 formats.

In 1993, Sony challenged the industry standard Dolby Digital 5.1 surround sound format with a newer and more advanced proprietary motion picture digital audio format called SDDS (Sony Dynamic Digital Sound). This format employed eight channels (7.1) of audio opposed to just six used in Dolby Digital 5.1 at the time. Unlike Dolby Digital, SDDS utilized a method of backup by having mirrored arrays of bits on both sides of the film which acted as a measure of reliability in case the film was partially damaged. Ultimately, SDDS has been vastly overshadowed by the preferred DTS (Digital Theatre System) and Dolby Digital standards in the motion picture industry. SDDS was solely developed for use in the theatre circuit; Sony never intended to develop a home theatre version of SDDS.

In 1998, Sony launched their Memory Stick format; flash memory cards for use in Sony lines of digital cameras and portable music players. It has seen little support outside of Sony's own products with Secure Digital cards (SD) commanding considerably greater popularity. This is due in part to the SD format's greater throughput (which allows faster recording and access), higher capacities, and significantly lower price per unit capacity compared to Memory Sticks available at the same time. Sony has made updates to the Memory Stick format with Memory Stick Duo and Memory Stick Micro.

Sony and Philips jointly developed the Sony-Philips digital interface format (S/PDIF) and the high-fidelity audio system SACD. The latter has since been entrenched in a format war with DVD-Audio. At present, neither has gained a major foothold with the general public. CDs are preferred by consumers because of ubiquitous presence of CD drives in consumer devices.

In 2004, Sony built upon the MiniDisc format by releasing Hi-MD. Hi-MD allows the playback and recording of audio on newly-introduced 1 GB Hi-MD discs in addition to playback and recording on regular MiniDiscs. Recordings on the Hi-MD Walkmans can be transferred to and from the computer virtually unrestricted, unlike earlier NetMD. In addition to saving audio on the discs, Hi-MD allows the storage of computer files such as documents, videos and photos. Hi-MD introduced the ability to record CD-quality audio with a linear PCM recording feature. It was the first time since MiniDisc's introduction in 1992 that the ATRAC codec could be bypassed and lossless CD-quality audio could be recorded on the small discs.

Sony was one of the leading developers and remains one of the strongest proponents of the Blu-ray Disc optical disc format, which eventually emerged as the market leader over the competing standard, Toshiba's HD DVD, after a 2 year-long format war. The first Blu-ray players became commercially available in June 2006, and Sony's first Blu-ray player, the Sony BDP-S1, debuted in December 2006 with an MSRP of US $999.95. By the end of 2007 the format had the backing of every major motion picture studio except Universal, Paramount, and DreamWorks.[15][16][17] The Blu-ray format's popularity continued to increase, solidifying its position as the dominant HD media format, and Toshiba announced its decision to stop supporting HD DVD on 19 February 2008.

Over the years, Sony has introduced these standards:

Products

Sony offers a number of products in a variety of product lines around the world. Sony has developed a music playing robot called Rolly, dog-shaped robots called AIBO, humanoids, and QRIO.

PlayStation

In late 1994 Sony launched the PlayStation to compete with other consoles. This successful console was succeeded by the PlayStation 2 in 2000. The PlayStation 2 has become the most successful video game console of all time, selling over 150 million units as of 2011. The PlayStation brand was extended to the portable games market in 2005 by the PlayStation Portable (PSP). Sony developed the Universal Media Disc (UMD) optical disc medium for use on the PlayStation Portable. Although Sony tried to push the UMD format for movies, major-studio support for the format was cut back in spring 2006, though as of 2009 some major-studio titles continue to be released on UMD.

Sony released the PlayStation 3, a high-definition console, in 2006. It later introduced the PlayStation Move, an accessory that allows players to control video games using motion controllers. Sony announced that on 1 April 2010[18] it was electronically removing Linux[19] functionality from the first generation PS3.[20] A class action has been taken out in California challenging the legality of "the disablement of valuable functionality originally advertised".[21]

Sony admitted in late 2005 to hiring graffiti artists to spray paint advertisements for their PlayStation Portable game system in seven major cities including New York City, Philadelphia, San Francisco,[22] and Sydney, Australia. The mayor of Philadelphia filed a cease and desist order. According to Sony, they paid businesses and building owners for the right to graffiti their walls.[23] As of early January 2006, Sony had no plans to keep or withdraw them.

In November 2006, a marketing company employed by Sony created a website entitled "All I want for Xmas is a PSP", designed to promote the PSP through viral marketing. The site contained a blog, which was purportedly written by "Charlie", a teenager attempting to get his friend "Jeremy"'s parents to buy him a PSP, providing links to t-shirt iron-ons, Christmas cards, and a "music video" of either Charlie or Jeremy "rapping". However, visitors to the website soon discovered that the website was registered to a marketing company, exposing the site on sites such as YouTube and digg, and Sony was forced to admit the site's true origin in a post on the blog, stating that they would from then on "stick to making cool products" and that they would use the website for "the facts on the PSP". The site has since been taken down. In an interview with next-gen.biz, Sony admitted that the idea was "poorly executed".[24]

In 2003, Sony Computer Entertainment America, marketer of the popular PlayStation game consoles, was sued by Immersion Corporation of San Jose, California which claimed that Sony's PlayStation "Dual Shock" controllers infringed on Immersion's patents. In 2004, a federal jury agreed with Immersion, awarding the company US$82 million in damages. A U.S. district court judge ruled on the matter in March 2005 and not only agreed with the federal jury's ruling but also added another US$8.7 million in damages. This is likely the reason that the Sixaxis controller for the PlayStation 3 had no rumble feature. The DualShock 3 has since been made available for the PlayStation 3, reintroducing rumble capabilities. Microsoft Corp. was also sued for its Xbox controller, however, unlike Sony, they settled out of court so they could continue using the technology for the follow-up Xbox 360.[25] A California judge ordered Sony to pay Immersion a licensing fee of 1.37 percent per quarter based on the sales of PlayStation units, Dual Shock controllers, and a selection of PlayStation 2 games that use Immersion's technology.[citation needed]

VAIO

Sony offers a line up laptops branded as VAIO. Previously Sony has disabled hardware virtualization on their high end VAIO laptops, citing concern for users running malicious code.[26] However, most new VAIO laptops can utilize virtualization.[27]

Laptop batteries dysfunction

In April 2006, a Sony laptop battery exploded in Japan and caught fire. A Japanese couple in Tokyo sued both Sony and Apple Japan for over ¥2 million (US$16,700) regarding the incident. The suit argues that the man suffered burns on his finger when the battery burst into flames while being used, and his wife had to be treated for mental distress due to the incident.[28]

On 14 August 2006, Sony and Dell admitted to major flaws in several Sony batteries that could result in the battery overheating and catching fire. As a result they recalled over 4.1 million laptop batteries in the largest computer-related recall to that point in history. The cost of this recall was shared between Dell and Sony. Dell also confirmed that one of its laptops caught fire in Illinois.[29][30] This recall also prompted Japan's Ministry of Economy, Trade and Industry to order the companies to investigate the troubles with the batteries. The ministry said that Sony must have reported on their findings and drawn up a plan to prevent future problems by the end of August, or face a fine under consumer safety laws.[31] On 23 September 2006, Sony announced its investigation[32] of a Lenovo ThinkPad T43 laptop which overheated and caught fire in the Los Angeles International Airport on 16 September, an incident that was confirmed by Lenovo.

On 28 September 2006, Sony announced a global battery exchange program in response to growing consumer concerns.[33] Acer, Apple Computer, Dell, Fujitsu, IBM, Lenovo, Hewlett-Packard, and Toshiba all recalled Sony laptop batteries.[34] It was also reported that Fujitsu, Toshiba, and Hitachi were considering the possibility of seeking compensation from Sony over the battery recalls.[35]

A Japanese newspaper, Yomiuri Shimbun, reported that Sony was aware of faults in its notebook PC batteries in December 2005 but failed to fully study the problem.[36][37]

Sony Pictures Entertainment

In July 2000, a marketing executive working for Sony Corporation created a fictitious film critic, David Manning, who gave consistently good reviews for releases from Sony subsidiary Columbia Pictures that generally received poor reviews amongst real critics.[38] When the scandal was revealed, Sony apologised to Ridgefield Press, the newspaper Manning was claimed to be from. Sony claimed it was unaware of the marketing ploy, and pulled the ads and suspended Manning's creator and his supervisor. In 2003, Sony paid the state of Connecticut $325,000 in fines following the Connecticut Attorney General's investigation into Sony's alleged fraudulent marketing practices.[39] In August 2005, Sony finalized a settlement to pay $1.5m to fans who saw the reviewed films in the US.[40]

In 2006 Sony started using ARccOS Protection on some of their film DVDs, which caused compatibility problems with some DVD players – including models manufactured by Sony. After complaints, Sony was forced to issue a recall.[41]

Sony BMG

In October 2005, it was revealed by Mark Russinovich of Sysinternals that Sony BMG's music CDs had installed a rootkit on the user's computer as a DRM measure (called Extended Copy Protection by its creator, British company First 4 Internet), which was difficult to detect or remove.[42] This constitutes a crime in many countries, and poses a major security risk to affected users. The uninstaller Sony initially provided removed the rootkit, but in turn installed a dial-home program that posed an even greater security risk. Sony eventually provided an actual uninstaller that removed all of Sony's DRM program from the user's computer. Sony BMG faced several class action lawsuits regarding this matter.[43] On 31 January 2007, the U.S. Federal Trade Commission issued a news release announcing that Sony BMG had agreed to settle Federal Trade Commission charges that Sony BMG committed several offenses against United States federal law. This settlement required that Sony BMG allow consumers to exchange the CDs through 30 June 2007, and to reimburse consumers for up to $150 for the repair of damage to their computers that they may have incurred while removing the software.

In September 2009 Sony had its Mexican office raided by police to recover over 6000 CDs, masters and artwork, by the popular Latin American artist Alejandro Fernández. Fernández's lawyers claimed that Sony was in breach of contract as Fernández had been contracted to Sony for seven albums and the recordings were an eighth album made after the contract had expired.[44]

Digital photography

Sony offers a range of digital cameras, ranging from point-and-shoot models to digital SLRs.

Initially, in October 2005, it was reported by Sony that there were problems with the charge-coupled devices (CCD) in 20 models of digital still cameras. The problems can prevent the cameras from taking clear pictures, and in some cases, possibly prevent a picture being taken at all. In late November 2006, the recall was broadened to eight additional models of digital cameras sold between 2003 and 2005. The problem appears to manifest itself mostly when the camera is used in areas with hot weather. The eight models affected are the following: DSC-F88, DSC-M1, DSC-T1, DSC-T11, DSC-T3, DSC-T33, DSC-U40 and DSC-U50. Sony indicated that they would repair or replace the affected camera at no charge. Since Sony is one of the largest producers of CCD chips, this recall may affect other manufacturers and models of cameras, possibly as many as 100 models or more. Other manufacturers of digital cameras, including Canon, Minolta, Nikon, Olympus or Fuji have indicated they will replace faulty CCDs in their respective models of cameras if necessary.[45]

Corporate information

Sony's current CEO, president and chairman Sir Howard Stringer

On 22 June 2005, Nobuyuki Idei stepped down as Sony Corp. Chairman and Group CEO and was replaced by Howard Stringer, then Chairman and CEO of Sony Corporation of America, Corporate Executive Officer, Vice Chairman and COO Sony Entertainment Business Group. Sony's decision to replace Idei with the British Howard Stringer marked the first time that a foreigner has run a major Japanese electronics firm. On the same date, Kunitake Ando stepped down as President and was replaced by Ryoji Chubachi.[46]

Sony's former slogans were "It's a Sony", "like.no.other" and its current slogan is "make.believe".

Mergers, acquisitions, and joint ventures

Regional manufacturing and distribution

Slightly more than 50% of the electronics' segment's total annual production during the fiscal year 2005 took place in Japan, including the production of digital cameras, video cameras, flat panel televisions, personal computers, semiconductors and components such as batteries and Memory Sticks. Approximately 65% of the annual production in Japan was destined for other regions. China accounted for slightly more than 10% of total annual production, approximately 70% of which was destined for other regions.

Asia, excluding Japan and China, accounted for slightly more than 10% of total annual production with approximately 60% destined for Japan, the US and the EU. The Americas and Europe together accounted for the remaining slightly less than 25% of total annual production, most of which was destined for local distribution and sale.[47]

Sony's Sales and Distribution by Geographical Regions in 2009[48]

Geographic Region Total Sales (yen in millions)
Japan 1,873,219
United States 2,512,345
Europe 2,307,658
Other Area 2,041,270

On December 9, 2008, Sony Corporation announced that it would be cutting 8,000 jobs, dropping 8,000 contractors and reducing its global manufacturing sites by 10% to save $1.1 billion a year.[49]

Finance and Revenue

In May 2011, Sony expected to lose a total of 260 billion yen ($3.2 billion) for the year, due to the effects of the Japanese earthquake. The forecast of a $3.2 billion loss was quite different than its earlier projection of a profit of 70 billion yen ($857 million) for the year.[50]

Environmental record

In November 2011, Sony was ranked 9th (jointly with Panasonic) in Greenpeace’s re-launched Guide to Greener Electronics that assesses the policies and practices to reduce climate impact, produce greener products, and make operations more sustainable of 18 leading electronics manufacturers. The company scored 3.6/10, incurring a penalty point for comments it has made in opposition to energy efficiency standards in California. It also risks a further penalty point in future editions for being a member of trade associations that have commented against energy efficiency standards. [51]

Together with Phillips, Sony receives the highest score for energy policy advocacy after calling on the EU to adopt an unconditional 30% reduction target for greenhouse gas emissions by 2020. Meanwhile, it receives full marks for the efficiency of its products; all of its TVs meet or exceed the latest Energy Star standards. However, Sony scores no points on its paper policy, risking another penalty point in future editions, as it is listed as a client of Asia Pulp and Paper (APP), a company associated with illegal logging and deforestation in Indonesia.[51]

Sony publishes on its website a list of products, for which the company had (as of February 2010) or intended to replace PVC and BFR with alternative substances by the end of FY 2010 (April 2011), nevertheless as of January 2011 the list does not identify which products are fulfilling these criteria at the moment.[52]

Improvement efforts

Since 1976, Sony has had an Environmental Conference.[53] Sony's policies address their effects on global warming, the environment, and resources. They are taking steps to reduce the amount of greenhouse gases that they put out as well as regulating the products they get from their suppliers in a process that they call "green procurement".[54] Sony has said that they have signed on to have about 75 percent of their Sony Building running on geothermal power. The "Sony Take Back Recycling Program" allows consumers to recycle the electronics products that they buy from Sony by taking them to eCycle (Recycling) drop-off points around the U.S. The company has also developed a biobattery that runs on sugars and carbohydrates that works similarly to the way living creatures work. This is the most powerful small biobattery to date.[55]

Green TV

For sale in Japan on 30 July 2008, Sony's green product, new flat-panel 32-inch (810 mm) TV 150,000 yen (US$ 1,400; € 900)Sony Bravia KDL-32JE1 offers ecological consumers advantages of less energy consumption (70% less) than regular models with the same image quality. It is one of the power least power consuming LED TV. Sony was able to reduce carbon dioxide emissions totaling 79 kilograms (174 pounds) a year, without sacrificing quality by developing a brighter back light and better filtering, which produces light more efficiently. The TVs will have liquid crystal displays along with high-definition digital broadcast capabilities.[56][57][58]

Criticism

In 2000, Sony was ridiculed for a document entitled "NGO Strategy" that was leaked to the press. The document involved the company's surveillance of environmental activists in an attempt to plan how to counter their movements. It specifically mentioned environmental groups that were trying to pass laws that held electronics-producing companies responsible for the clean up of the toxic chemicals contained in their merchandise.[59] In early July 2007, Sony ranked 14th on the Greenpeace chart "Guide to Greener Electronics." This chart graded major electronics companies on their environmental work. Sony fell from its earlier 11th place ranking due to Greenpeace's claims that Sony had double standards in their waste policies.[60]

Controversy and cyber attacks

On 11 January 2011, Sony Computer Entertainment (SCE) filed suit against George Hotz for publishing a technique for hacking the PlayStation 3 to allow it to run alternative operating systems like Linux. The case, Sony Computer Entertainment America v. George Hotz, attracted much negative publicity among hackers and on the Internet at large. On or about 4 April 2011, adherents of the Anonymous movement declared in an open letter[61] that they were directing their hostile "undivided attention" against Sony, largely in response to the Hotz case.[62]

On 21 April 2011, Sony Computer Entertainment was subjected to distributed denial of service attacks, apparently in retaliation for its case against Hotz.[63][64] On April 26 Sony announced that the PlayStation Network (PSN) had been attacked, allegedly resulting in the theft of the personal information of 77 million account holders. It seems that the attack took place between April 17 and 19.[65] Sony blamed Anonymous for the attack,[66] although at least some Anonymous members denied responsibility.[67] Sony decided to shut down the PlayStation Network "indefinitely" following the attack,[68] although it returned to service on 14 May, following a 26 day outage.[69]

Sony was criticized for waiting 6 days after the 21 April attack to disclose the breach to users who may have been impacted,[70] and for storing information including credit card numbers, passwords, and security questions, without sufficient encryption.[71] The company now faces a class action lawsuit seeking redress for PlayStation Network users.[72] A subsequent lawsuit[73] between Sony’s insurers sought declaratory action for clarification of their responsibilities listed under the individual policies they had written for Sony. The insurers facing litigation are Mitsui Sumitomo Insurance, AIG, and ACE Ltd.[74] On 5 May, Sony released a letter from chairman Sir Howard Stringer, directed at PSN and Qriocity Music Service users, announcing plans for a program which includes a $1 million identity theft insurance policy per user.[75] Australia has called for a ban on PSN until Sony can prove network security,[76] while Japan is the first country to place an outright ban on the service.[77] The PSN service has been fully restored in Japan as of July 5th 2011.

On 25 May, Sony announced that its Sony Ericsson website in Canada and the Sony Music Entertainment website in Greece had been compromised, putting the personal information of more than 10,000 users at risk.[78] Security consultant Phil Lieberman said Sony's approach to customers that wanted to modify PlayStation 3 software, including the decision to sue Hotz, was a fatal mistake. "Telling them to bring it on is not the best strategy. I think Sony is beginning to understand it horribly underinvested in security," Lieberman said.[79][80] On 29 May 2011, a group called Lulz Security announced[81] a campaign against Sony, using language emblematic of the Anonymous movement. On 2 June 2011, Sony Pictures Entertainment was the subject of an attack, disclosing 1 million user passwords, which were then distributed via BitTorrent.[82]

See also

Portal icon Sony portal
Portal icon Tokyo portal
Portal icon Companies portal


References

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