Sony’s PlayStation Network hack attack repair bill: $1.6 million or $1.25 billion?

Video game fans aren’t the only ones waiting for Sony to say more about the PlayStation Network’s woes. Wall Street is getting a little anxious too.

The question is whether the hacker attacks on the PlayStation Network and the Station online gaming services — which together have exposed the personal data of more than 100 million customers — could expose Sony to some big losses as it spends money to assuage users and protect them against future attacks. Naturally, since there are many unknowns, the estimates of possible losses are all over the place, from a mere $1.6 million to more than $1.25 billion.

Michael Pachter, the video game analyst at Wedbush Morgan Securities, said there are many unknowns. But he said that if 5,000 people have their credit card information ripped off by hackers and they report losses that Sony is responsible for, then the cost of paying for those costs might be $1.6 million.

But Mizuho Investors Securities analyst Nobuo Kurahashi told the Wall Street Journal that the data breach could cost Sony about $1.25 billion from lost business, compensation costs, and new investments in security technology. That assumes that no additional security problems arise. Since Anonymous, the hacktivist group that has tangled with Sony for weeks, might be planning another attack, there is still no telling what could happen.

Consequently, Sony’s shares have fallen more than 6 percent since the beginning of the two-week crisis. One of the big intangibles is the damage to Sony’s brand image. That could be immeasurable, since Sony had one of the most valuable brands in all of electronics. Kurahashi said it could take months for the dust to settle. The incident could also have a long-term effect on whether Sony can earn the trust of users for its many different cloud entertainment services in the future.

Sony is scheduled to report its earnings for the fiscal year ended March 31, 2011 on May 26. Sony told the Wall Street Journal that it had no estimates yet for the impact on earnings from the data breach. The company was already reeling from the quake and tsunami that hit Japan.

The only thing clear so far is that the crisis has lasted longer than Sony thought, and bringing the system back online is taking longer as well.

Sony is mulling a reward for information leading to the arrest and prosecution of the hackers, according to AllThingsDigital. Seybold didn’t address this matter in his post. Sony also has to make sure it protects itself from more possible hacker attacks. The company said yesterday that it is offering a $1 million insurance policy to protect U.S. PSN users from identity theft, since Sony it isn’t sure if hackers stole 10 million customer credit card numbers.

J.P. Morgan published a report noting that “Sony is the victim here” even though the Japanese consumer electronics giant has been widely criticized for its slow disclosure. The report noted that Sony has not provided any cost guidance related to the insurance policy.

Sony’s top executives have repeatedly apologized for the outage. Check out our timeline of Sony’s hacker troubles.