The Information Commissioner’s Office (ICO) found that Sony could have prevented being hacked in April 2011.
Sony's April 2011 hack of its PlayStation platform saw the personal data of millions of customers put at risk.
Personal information including names, addresses, email, account passwords, payment card details and dates of birth were also comprised.
An ICO investigation discovered the attack could have been avoided if Sony had updated their software. The out-of-date software meant that many passwords were not secure.
"If you are responsible for so many payment card details and log-in details then keeping that personal data secure has to be your priority," said David Smith, deputy commissioner and director of data protection at ICO. "In this case that just didn't happen, and when the database was targeted - albeit in a determined criminal attack - the security measures in place were simply not good enough.
"There's no disguising that this is a business that should have known better. It is a company that trades on its technical expertise, and there's no doubt in my mind that they had access to both the technical knowledge and the resources to keep this information safe."
Sony had been scrutinised in April 2011 for not immediately revealing the data theft. At the time the company shut down its PSN but did not disclose to the public or customers what had happened.
After the breach, however, Sony rebuilt its Network Platform to make sure any personal information it receives is kept safe.
The company simply said it was investigating an "external intrusion" and upgrading its security with additional features.
"The case is one of the most serious ever reported to us. It directly affected a huge number of consumers, and at the very least put them at risk of identity theft," added Smith.
"If there's any bright side to this it's that a PR Week poll shortly after the breach found the case had left 77 per cent of consumers more cautious about giving their personal details to other websites. Companies certainly need to get their act together but we all need to be careful about who we disclose our personal information to."