Sony Doesn't Want to Keep Playing This Game

Sony's (NYSE: SNE  ) nightmare isn't over.

It took nearly a month for Sony to restore its gaming network after a serious hack exposed account information of more than 100 million gamers. Now a new security exploit is crashing its coming out party.

In news originally broken last night by gaming news hub Nyleveia.com, a new hack allows identity thieves to reset account passwords by simply entering a gamer's email account and birth date. Adding insult to injury, these two data points were among those swiped last month.

Sony seemed to be doing everything possible to make up for the breach and self-imposed outage. Providing exposed gamers with identity theft protection, credits, and free downloads seemed to ease the sting. However, if Sony's network continues to be made vulnerable, gamers will have no choice but to stop trusting Sony.

Sony's loss will initially be Microsoft's (Nasdaq: MSFT  ) gain. There are already plenty of anecdotal stories out there of consumers trading in their PS3s for Xbox 360s. What if Microsoft comes under attack, though?

"Nobody's system is 100% secure," Sony CEO Howard Stringer said in a Bloomberg interview this week.

Sure, it's easy for him to say.

Another near-term winner is GameStop (NYSE: GME  ) . It scores its thickest margins from its trade-in business. Anything that slows the digital migration is also good news for the bricks-and-mortar gaming chain, even as the company continues to nibble away at acquisitions that will make it relevant in the inevitable future of disc-less gaming.

There's never a good time to be exposed, but the timing now is brutal for Sony.

Xperia Play -- the PlayStation-centric smartphone that Sony is putting out with mobile partner Ericsson (Nasdaq: ERIC  ) -- hits Verizon (NYSE: VZ  ) next week. Pre-orders start tomorrow. Yes, this is the long-rumored handset that slides out to reveal PSP gaming controls.

Ouch. Xperia looks great, but how brisk a seller can it be if consumers can no longer trust Sony to protect them as gamers?

Wake up Sony! You're going to sleep right through a monster opportunity.

Can a Sony Ericsson PlayStation Phone take off? Share your thoughts in the comment box below.

The Motley Fool owns shares of GameStop and Microsoft. Motley Fool newsletter services have recommended Microsoft. Motley Fool newsletter services have recommended writing covered calls in GameStop. Motley Fool newsletter services have recommended creating a diagonal call position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Longtime Fool contributor Rick Munarriz doesn't even know where his PSP is, though he does use his PS3 often to stream movies. He does not own shares in any of the stocks in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy, and it knows that roaming charges weren't billed in one day.


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