Sony pulls plug on 'The Interview' following terror threats from North Korea

SAN FRANCISCO (KGO) -- Federal investigators say that North Korea is responsible for that giant hacking scandal against Sony Pictures. The hackers demanded that Sony cancel its upcoming release of the movie "The Interview" and that's exactly what the studio did. Now, there is a lot of concern about buckling to this kind of pressure.

This cyber war has Hollywood surrendering. Sony is pulling the plug on its controversial movie and canceling its Christmas Day release. The studio says it's been the victim of an unprecedented criminal assault.

Sony's decision came after thousands of theaters including Regal, Cineplex and AMC decided not to show the comedy about a plot to assassinate North Korea leader Kim Jong-un.

"We believe that this film should have gone into theaters. We showed it in a theatre and we had a really great screening!" San Francisco Film Society director Noah Cowan said.

Cowan showed "The Interview" at the Castro Theatre last month, hosted by Seth Rogan and director Evan Goldberg. The choice to pull it was unbelievable to Cowan.

"To see this level of self-censorship take place within the film industry is not a good thing," Cowan said. "It's a chilling effect on future productions."

What began as a Hollywood cyber breach exposing embarrassing emails from studio executives became a threat to national security, according to federal officials. Those responsible for the hack warned theaters and movie goers, "If your house is nearby, you better leave."

It's unclear if Sony will ever release "The Interview" in theaters or on any other platforms.

We're also learning there are plans for an untitled thriller set in North Korea, starring Steve Carrell, have reportedly been scrapped by 20th Century Fox.