INNOVATING AT WORLDWIDE GAMES

Worldwide Games develops and markets gaming software and devices. Game enthusiasts are always on the lookout for game$-$playing experiences that are more

intense and lifelike, so Worldwide is constantly looking to innovate. The company has developed several advances in screen resolution, processor speed, new kinds

of controllers, creative story lines, and more. Its console division focuses on hardware technology, and its online division focuses on powerful new gaming software,

often involving elaborate story lines played by subscribers around the world. Continuous innovation in both divisions keeps Worldwide on par with its major

competitors.

In recent years, two related areas of technology have fueled the growth of Worldwide and its competitors: social networking and the ability of broadband Internet

connections to deliver fast audio and video streams for playing elaborate games online. $5$ G will likely further accelerate this growth. Worldwide's console division

has adopted technology by inviting purchasers of its latest console to join its Players Network. Those who join the Players Network can use their console to play

online with other members anywhere in the network. In addition, Worldwide's online division continues to push the limits of online gaming.

Because a necessary component of any Worldwide game is for players to register and pay a fee or join the Players Network, Worldwide collects not only money

from customers but also information about them. That system came under real risk when hackers recently broke into first the Players Network database and then

the registration records of Worldwide Online's subscribers.

As soon as the company detected an intrusion into the Players Network, it shut down the network. When the company's security employees realized they

couldn't immediately prevent intrusions within a day or two, Worldwide announced that hackers had obtained the names and possibly the credit card page $525$

numbers of its tens of millions of network members. Until the problem was fixed, they would be able to play games from disks loaded into their

consoles but would not be able to use the network.

Fixing the problem, which took about a month, included adding firewalls and encryption to the existing security measures. Afterward the company reopened the

network, apologized to consumers, and offered a month of free access to paid services. Returning customers had to download upgraded security software before

they could resume play. The entire incident cost the company hundreds of millions of dollars for the investigation, upgrades, and lost sales.

As operations returned to normal, Worldwide announced that it had hired a chief information security officer. This manager reports to the company's chief

information officer, who reports to the chief transformation officer, who reports to the chief executive officer.

DISCUSSION QUESTIONS

Is Worldwide Games a technology leader or a technology follower? What are the risks and benefits of staking out this position?

What opportunities might Worldwide be missing by not having its chief information officer report directly to the CEO?

What makes innovation important for Worldwide? Following the hacking incident, how might bureaucracy be expected to interfere with innovation? How

should Worldwide engage in bureaucracy busting without compromising security?