Analysts: Sony attack shows lack of hardware innovation

Sony's recent attacks from hacker groups, the most recent of which saw Sony BMG falling victim, have been estimated to cost the company within the region of $1 billion. But while users see the figure as a mark of the sizeable damage the hacks caused, industry analysts are approaching the bill from a different angle.

Speaking to The Independent, Toshiyuki Kanayama expressed concern that Sony are losing sight of how to innovate in the hardware area. "What is important is that they make attractive products. Unless they do that, why should consumers choose to buy Sony products?" he said. "Sony says it wants to bring its software to its hardware. Look at Apple. Software followed its attractive products."

Nikkei, the Japanese media empire, also said that Sony are sorely lacking in hardware, claiming that Sony has "nothing" to pick itself up with. The outlet went on to speculate that Sony's yearly profit will come from severe cuts rather than actual growth.

Historically, Sony has been a hardware company, and its largest milestones have been physical products. While a shift towards software echoes the sentiments of the rest of today's industry, companies such as Apple have shown the connection between hardware and software is just as important to consumers.

However, not everyone is negative about the long term. In a note to clients, Goldman Sachs said: "We think it is a matter of time until concern over the attacks and the earthquake impact fades." Shiro Mikoshiba from Nomura securities was also skeptical about any long lasting effects. "The impact on Sony's earnings should be contained in the April-June quarter," he said.

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"Analysts: Sony attack shows lack of hardware innovation"
That has to be one of the most misleading titles I have ever seen on here. Sony's not Apple, so that's why hackers targeted it? How the hell does that conclusion get drawn? That's not at all what the article is about! WTF?

Skwerl said,
"Analysts: Sony attack shows lack of hardware innovation"
That has to be one of the most misleading titles I have ever seen on here. Sony's not Apple, so that's why hackers targeted it? How the hell does that conclusion get drawn? That's not at all what the article is about! WTF?
Apparently, we are not the only ones not seeing the correlation between the attacks and the lack of hardware innovation.

It's simple. Sony became complacent. This is the result of their actions. This article speaks volumes against the company as a whole. Look at their products vs the competition in most areas and you'll understand.

Anyone that can still make excuses for Sony after all this needs therapy. Sony have screwed up bigtime in a number of ways since the PS3 launch and they seem to continue doing so on a weekly basis.

However, not everyone is negative about the long term. In a note to clients, Goldman Sachs said: "We think it is a matter of time until concern over the attacks and the earthquake impact fades."
Odd...Goldman Sachs seems to think Sony is just fine and dandy. Maybe they're heavily invested in Sony and need to bail? Hmmm...this is the same crooked corrupt Goldman Sachs that robbed millions (billions?) of dollars from the American people? The same Goldman Sachs that has some of their top execs swapping jobs with the SEC and treasury? I'm sure they would never try to paint a rosy picture so they can dump the stock before running for the hills. Oh yeah, I'll listen to them. Sure.

Lets all bash Sony and ..... praise Apple. If Anonymous targeted Apple then it would fall too. These analysts are idiots.

kingius said,
Lets all bash Sony and ..... praise Apple. If Anonymous targeted Apple then it would fall too. These analysts are idiots.

Apple has been targeted not once but several times (mainly itunes account and apple developer account) but those news are not made public, they are minimized or they simply blame other company.

Ok, the first responses are very consumer minded.

Sony has a history of doing things their own way, and this also includes their server technologies and infrastructure.

Several years ago they bought out database technologies that they replaced more established and secure databases, to save money, and as they proclaimed for 'faster' systems, but as gamers that are close to the higher performing database servers can attest, the performance in the change over was horrid, and flatlined all other code reductions and overhead just to meet their current performance levels.

(SWG is a good example of seeing this happen, yes it is a MMO horror story, but Sony also reduced the transaction and server side computing by over 25%, and as they advertised at the time while gutting the game to do this, they would have more room to add more features and handle more users. The result, they code reduction was eaten up by the slower databases and servers. If you look at SWG post NGE like around 2009, they were handling maybe 10 to 50 thousand users, and were still having server congestion and lag, yet in 2003/2004 they were hosting 250,000 users with a more complex server side system of handling the game mechanics, and had less problems.)

Over the past 10 years anyone in the tech industry has followed Sony as they have moved from Windows and some early Linux servers to SUSE Linux and their own Linux and some frankenstein server OS projects for their infrastructure and servers. Along with virtualizing them and dropping them in fairly untested server technologies.

So they have a layer of untested server technologies hositing virtual servers that are non-consistent, poorly updated - especially their own custom server OS variations from Linux and FreeBSD, etc. ---Which is what anyone that takes security seriously calls a nightmare waiting to happen.

And that nightmare happened and is continuing to happen.

So this is very much a Sony and their arrogance, along with a looming level of arrogance of how safe and secure Linux and other OS technologies seem to fall victim to believing that because they aren't Windows servers they are inherently better or more secure, and they just aren't.

As for the Sony consumer hardware end, the PS3 is an example of how bad Sony is at pairing hardware and software. In theory the PS3's main CPU should smoke an XBox 360, yet between the bad GPU decision and the poor optimization of the PS3 OS and development and compiler technologies, it struggles to remain competitive with the 360, when in theory it shouldn't even be close.

Sony also had to dump doing GPU on the Cell CPU and drop in a Geforce 7900 GPU late in the development process after they saw what the XBox GPU was going to be capable of producing. Renaming the PS3 GPU doesn't change the fact it is a slightly underclocked Geforce 7900 and is a major problem in sucking out even more CPU cycles from the Cell processor and a horrid design flaw. (It is a generation behind the XBox GPU in features - think DX10/DX11 vs the PS3's DX9 level GPU. - Yes the XBox GPU has DX11 features, as it wasn't until DX11 that Windows development of DX11 games was directly portable to the XBox 360, as DX10 didn't meet all the feautres the XBox DirectX version and hardware offered.)


Sony has spun from a solid company and a good brand to a decade of arrogance and poor management and bad decisions on every level. And this includes their internal IT infrastructure, the consumer gaming/computing hardware, and even their decisions in the gaming industry from SOE and their taking a brilliant MMO line up to the joke of the industry.

So ya, I have to agree, Sony shouldn't have been building their own servers and putting together 'experimental' solutions with Novell and others when there were solid choices that would have removed the problems they are having now, and would at the very least they could have called Microsoft and said, help...

And this isn't even jumping into the argument of data storage concepts that many othe big companies STILL don't get, like Apple, Google, etc. (There is no need for human readable data stores.)

Congratulations on your wall of text and history lesson. Only problem is, this article is in fact based around the Sony - Consumer relationship. i.e:

What is important is that they make attractive products. Unless they do that, why should consumers choose to buy Sony products?

Apple have shown the connection between hardware and software is just as important to consumers

It's great you give the insight of what Sony may have done in regards to network infrastructure but I still don't see how that bleeds into research and development of Sony's consumer products.

thenetavenger said,
Ok, the first responses are very consumer minded.

Sony has a history of doing things their own way, and this also includes their server technologies and infrastructure.

Several years ago they bought out database technologies that they replaced more established and secure databases, to save money, and as they proclaimed for 'faster' systems, but as gamers that are close to the higher performing database servers can attest, the performance in the change over was horrid, and flatlined all other code reductions and overhead just to meet their current performance levels.

(SWG is a good example of seeing this happen, yes it is a MMO horror story, but Sony also reduced the transaction and server side computing by over 25%, and as they advertised at the time while gutting the game to do this, they would have more room to add more features and handle more users. The result, they code reduction was eaten up by the slower databases and servers. If you look at SWG post NGE like around 2009, they were handling maybe 10 to 50 thousand users, and were still having server congestion and lag, yet in 2003/2004 they were hosting 250,000 users with a more complex server side system of handling the game mechanics, and had less problems.)

Over the past 10 years anyone in the tech industry has followed Sony as they have moved from Windows and some early Linux servers to SUSE Linux and their own Linux and some frankenstein server OS projects for their infrastructure and servers. Along with virtualizing them and dropping them in fairly untested server technologies.

So they have a layer of untested server technologies hositing virtual servers that are non-consistent, poorly updated - especially their own custom server OS variations from Linux and FreeBSD, etc. ---Which is what anyone that takes security seriously calls a nightmare waiting to happen.

And that nightmare happened and is continuing to happen.

So this is very much a Sony and their arrogance, along with a looming level of arrogance of how safe and secure Linux and other OS technologies seem to fall victim to believing that because they aren't Windows servers they are inherently better or more secure, and they just aren't.

As for the Sony consumer hardware end, the PS3 is an example of how bad Sony is at pairing hardware and software. In theory the PS3's main CPU should smoke an XBox 360, yet between the bad GPU decision and the poor optimization of the PS3 OS and development and compiler technologies, it struggles to remain competitive with the 360, when in theory it shouldn't even be close.

Sony also had to dump doing GPU on the Cell CPU and drop in a Geforce 7900 GPU late in the development process after they saw what the XBox GPU was going to be capable of producing. Renaming the PS3 GPU doesn't change the fact it is a slightly underclocked Geforce 7900 and is a major problem in sucking out even more CPU cycles from the Cell processor and a horrid design flaw. (It is a generation behind the XBox GPU in features - think DX10/DX11 vs the PS3's DX9 level GPU. - Yes the XBox GPU has DX11 features, as it wasn't until DX11 that Windows development of DX11 games was directly portable to the XBox 360, as DX10 didn't meet all the feautres the XBox DirectX version and hardware offered.)


Sony has spun from a solid company and a good brand to a decade of arrogance and poor management and bad decisions on every level. And this includes their internal IT infrastructure, the consumer gaming/computing hardware, and even their decisions in the gaming industry from SOE and their taking a brilliant MMO line up to the joke of the industry.

So ya, I have to agree, Sony shouldn't have been building their own servers and putting together 'experimental' solutions with Novell and others when there were solid choices that would have removed the problems they are having now, and would at the very least they could have called Microsoft and said, help...

And this isn't even jumping into the argument of data storage concepts that many othe big companies STILL don't get, like Apple, Google, etc. (There is no need for human readable data stores.)


That's a nice explanation about the security. But, as ppl above already said, the hardware refered in the arcticle was the products. Innovations in the hardware area (for the products, not internal security) are not related to the attacks. As someone already said, if they sell more hardware, the attacks wouldn't hurt Sony so much. I think the title of the arcticle is causing some misunderstandings..

thenetavenger said,
There is no need for human readable data stores.

That's a badly misguided view. If all else fails, then what?

Xenosion said,
Congratulations on your wall of text and history lesson. Only problem is, this article is in fact based around the Sony - Consumer relationship. i.e:

It's great you give the insight of what Sony may have done in regards to network infrastructure but I still don't see how that bleeds into research and development of Sony's consumer products.

Seriously, you don't see any correlation between the same technical engineers designing the consumer hardware and also designing the internal hardware and software instructure to be somewhat related?

How about when many of the manager and the engineers are the SAME PEOPLE making the SAME bad decisions?

If I had an employee team doing crappy work, and then assigned them to take care of our company's internal infrastructure, I would be a fool. This is why Sony are fools and why it is related. Go split hairs, but THE SAME PEOPLE are behind both bad decisions and the same bad code and hardware and security designs.

Want a direct example from my original post? The SWG developers that were writing the game code and chopping it up, were also working on the game server restructuring and the database design and the security and the infrastructure. So when they were writing code that a kid could write an in game script to steal 'money' from the game's economy, why on earth are they trusted to write secure database code and even OS code for their variants? This is not like they are even a related or the same division, but are literally the SAME PEOPLE writing the code.

Ricky65 said,

That's a badly misguided view. If all else fails, then what?

Then what? Well this is why you have several layers of redundancy, like Microsoft does for example. If you make 10 copies of a page of text, or give 10 secure ways to access an encrypted page of text, what is the difference? The availablity statistics are still the same, with the encrypted version being 100% secure from people having access to read the page.

Microsoft has literally been doing this for years without incident, all the Live/Hotmail/Skydrive/Azure/etc content hosted on Microsoft servers is non-human readable, and there is NO reason for it ever be human readable.

This is why you don't see Microsoft employees sifting through and querying data from user accounts and gaining information they have no business ever having access.

In contrast you see Google employees fired when their 'reading' of user data is used and made public. With Google defending their systems as the need for 'human readable', when it is a lack of their security and technology or just a flat out excuse for their own personal 'power' they gain by being able to dig up dirt on anyone that threatens them.

(If a well meaning Google employee could look at the contents of a powerful politician, and the politician threatens Google or the employee, do you not think they would 'restrain' themsevles from looking up any dirt to use to fight back?)

And with the Google example, their data is fully query accessible, so they can ask the data mined information or actual email content on what users are talking about, and the buzz going around the world. What prevents an Employee or Google themselves from seeing that Product XYZ is going to be hot as everyone is wanting one, and buy stock in the company?

Information and Knowledge is power, and Google and Apple and Amazon and others have a huge amount of power because they get users to 'trust' them, and hold their data in 'HUMAN READABLE' form on their servers. Microsoft intentionally encrypts the data from human readibility and data mining and queries, but yet the world sees Microsoft as 'evil', and they are one of the few companies doing the right thing and keeping data secure at the same time.

Like others have said I dunno how weak security relates to hardware. Also the gaming division has the NGP launching this year, from it's specs, it's quite clearly one of the more adventurous handhelds we've had in a while.

Audioboxer said,
Like others have said I dunno how weak security relates to hardware. Also the gaming division has the NGP launching this year, from it's specs, it's quite clearly one of the more adventurous handhelds we've had in a while.

Exactly. Weak security is weak security. Dishing out innovative hardware is not going to hide that fact or divert anyone's attention.

Audioboxer said,
Like others have said I dunno how weak security relates to hardware. Also the gaming division has the NGP launching this year, from it's specs, it's quite clearly one of the more adventurous handhelds we've had in a while.

true! I don't like oranges because apples taste bad? What a retard! but I guess he is an Analyst and he is paid to talk crap.

My understanding is that the analysts are saying that if Sony would have more hardware options, the hacking wouldn't have hurt as much, because they could have made up some of the money in hardware sales. But that's not the case, since Sony is relying more on software sales now, unlike the past.

smooth_criminal1990 said,
I would think the PS3 could be seen as rather innovative hardware, what with it's 7 core processor and other bells and whistles (some of them pulled).

And it took how long and how much more money for game devs to create games that utilized even half of those cores?

I cannot somehow relate network attacks to hardware innovation. I first thought that innovative hardware was some kind of latest servers with better hacking protection technologies.

I can sum up the article as a conversation between two hackers.
Hacker 1: Mate, Sony's Playstation 3 is outdated.
Hacker 2: Yeah, lets hack em'.

Not to criticize or anything, that's my take on this scenario.

Maybe it's too early for me to follow what they're saying.. What do their recent compromises and internal network infrastructure have to do with their products they sell?

Further, how does network insecurity relate to their innovation in the products they sell?

Xenosion said,
Maybe it's too early for me to follow what they're saying.. What do their recent compromises and internal network infrastructure have to do with their products they sell?

Further, how does network insecurity relate to their innovation in the products they sell?


They need to upgrade now, make the system more secure, which is stated in the first few sentences. "But while users see the figure as a mark of the sizeable damage the hacks caused, industry analysts are approaching the bill from a different angle."

It's not a problem of user losses, Just an Upgrade issue that's going to cost a lot ;(