RRoD.

Microsoft is as bad at hardware as Sony is with software.

What else is there to say?

Hmmm lets see...

PSN = not being able to play online for a couple of weeks.

RROD = having a dead console which is practically good for nothing.

though one.

RROD. No contest.

agree
it resume very well the situation...

The PSN security breach is a far bigger fuck up, plain and simple.

Yes, the 360's RROD is a problem that affected an unacceptably large percentage of 360's, but it was something Microsoft addressed as best as possible by extending the warranty to 3 years for RROD's. A 3 year warranty is the best warranty for a piece of electronic hardware that I've ever heard of. I understand that you can't play your 360 for a few weeks when it's in for repairs, but that doesn't change the fact that your warranty is good for a whole two more years in comparison to your PS3's or Wii's warranty.

The PSN breach, on the other hand, is a bigger issue because unlike the RROD, you'll never get some of your shit back. Sony can't take back your login information, nor can it take back your credit card info (if CC info was actually obtained). That information is long gone and there's absolutely nothing Sony can do to fix it, other than offer some crummy identity protection service. Additionally, there's something else that many of us PS3-owners probably lost: trust in Sony (I have, and it sucks because they've supplied me with the best console this gen). To compound matters, we can't go on PSN until they fix this mess.

All we get for the PSN fiasco is a game (we'll see what our choice is), and a month of PS Plus. Knowing my luck, I'll already own the game(s) available, and since I lost a month of PS Plus waiting for this shit to get resolved, I won't gain anything, but I'll still have lost my information.

This. 

I think there is no big competition any more the Rod is long gone History, the last Xbox 360s that have this  error within was made nearly 4 years ago and  almost nobody talkes of this error anymore  today. For today and the nearer future it is clear that the PSN thing has far more bad effects on Sony than the Rod has nowadays on Microsoft.

My opinion:

This discussion should not exist until we know the extent of the damage done to PSN, and the length of time damage was done to Sony via inactive services. The store is still not up, therefore Sony is losing money from this aspect of the problem (one of many). Until it is up, and all the lawsuits are settled, there is no way to objectively state which issue was worse.

However, from a financial aspect, I am going to say that PSN is likely to be worse than the RRoD fiasco. Sony will survive. The long-term effects from this are primarily going to surround internet fanboys arguing about why system X is better than the PS3.

The RROD is pretty bad, but the PSN is a wild card. Yeah, it doesn't affect all of us consumers, but the compromisation of sensitive PSN info can severely hurt not only the victim, but Sony as well.