• by Steve Smith , Staff Writer @popeyesm, May 3, 2011

The takedown of the Sony Playstation Network is big news for gamers, but it probably should be a chilling cautionary tale that deserved greater attention outside the realm of Portal 2 junkies. For those not up to speed, the network that serves tens of millions of PS3 (50 million sold) and PSP owners worldwide got breached last week by intruders, which exposed personal information from millions of members to some hackers out there. It is still unclear to Sony or anyone but the intruders whether credit card information was taken. But the breach prompted Sony to take down and reengineer the PSN as well as the entire Sony Online Entertainment network, which services enormous multiplayer games like Everquest and Star Wars Galaxies. The SOE network alone serves more than 24.5 million people. In the SOE direct debit records were stolen from 10,700 people, all from non-US markets. In total, the outage across PSN and SOE are affecting 77 million customers.

This is a huge event. A major media company has to end access to the digital delivery system it uses to supply not only games but video rentals to the massive collection of PS3s in market. A House Subcommittee hearing is taking up the case and trying to get Sony to testify, according to reports.

Also unprecedented are the make goods that Sony announced this weekend it would give users as it slowly brings the network back online this week. It even branded the offering as a "Welcome Back" appreciation program. Users will get free downloadable content to make amends, different according to region. Current PSN members will get a 30 day free membership in a premium Playstation Plus service, which provides free and discounted games, exclusive content, etc. for paid members. Unlike Microsoft's paid Xbox Live programs, Sony was always a free network system that only recently added a premium service. A recent analysis in investment site Motley Fool faults Sony for offering a no-cost network that only becomes a cost center for them and so may not compel the strongest security measures. Sony stock actually took a hit from this outage, even though the PSN represents such a small fraction of its business.

What happens when a major media network goes dark for a week? Well, you tend to forget it is there and you look for the easy alternatives. While I rarely if ever used the film and TV rental features of the PSN (the interface is not optimal) I did rely on the network for game trailers and demo downloads. Sony also has an ambitious PSN-exclusive video programming schedule, including a recent reality game series and regular games-related news programming with the requisite attractive geek-magnet hostess.

In an age of digital distribution of media content, this surely will not be the first or the biggest example of a leading brand simply going off the grid. It is unclear what price Sony will pay now that consumers' confidence has been shaken in the system. How Sony manages such an unnatural disaster will be a model, good or ill, that will inform the ones that happen inevitably next.