Cyber attack costs Sony $200 mn

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IANS | 23 Dec, 2014
Sony Pictures has suffered an estimated loss of $200 million on account of the recent cyber attack over the film "The Interview", according to various analysts.

Following the cyber attack, Sony had cancelled the release of the comedy film, starring James Franco and Seth Rogen, revolving around a fictitious US plot to assassinate North Korean leader Kim Jong-un.

The cost of the film's production -- about $44 million -- must be added to its promotional costs and the expenses associated with updating and changing the studio's computer systems, said analysts cited by The Hollywood Reporter.

The $200 million figure is expected to rise, given the expenses that the company will incur due to lawsuits that former employees have filed as a result of their personal data being stolen from Sony's database by the hackers.

At the close of trading last Friday on the US stock market, shares of Sony tumbled by 4.9 percent from the time the hacking incident was made public Nov 24.

However, not merely economic losses, the studio's credibility may fall substantially as a result of an erosion of public confidence, given the way it has tried to manage the crisis, with US President Barack Obama saying that Sony made a mistake in cancelling its Christmas screening of the film.

Moreover, the studio has been facing business difficulties for several months as a result of pressure from investor Daniel Loeb, who wants the company to sell all or part of the Los Angeles-based film and television studio.

The hacking attack led to theft of extensive amounts of proprietory Sony employee data, for which a group calling itself the "Guardians of Peace" had claimed responsibility.

The US government had alleged that North Korea was behind the attack.

The North Korean government, which was outraged by the film's storyline, claimed to have “clear evidence” that the US government engineered the project as a “propaganda” attack against the country, according to media reports.

However, it has denied being involved in the attack, which it however, termed as a “righteous deed”.

North Korea has urged US to conduct a joint investigation into the matter, although the US government has said that it stands by its accusation and will respond "proportionately".