Sony faces a potential class action lawsuit over restrictions on digital PlayStation games sales

    
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It would appear that the ongoing legal spat between Apple and Epic Games has prompted up further legal uprisings against digital game stores’ business practices. It’s the best explanation for why there’s recently been a class action lawsuit proposed by consumers against Sony for the way the company operates its PlayStation Store.

The lawsuit, which was filed this past Wednesday, claims that Sony stopped allowing third-party retailers such as Amazon, Walmart, and Best Buy, to sell download codes for PlayStation games two years ago, resulting in a monopoly on digital PlayStation game sales.

“Sony’s monopoly allows it to charge supracompetitive prices for digital PlayStation games, which are significantly higher than their physical counterparts sold in a competitive retail market, and significantly higher than they would be in a competitive retail market for digital games.”

According to some figures gathered by lawyers in the suit, popular games are sold 75% more on the PlayStation store than physically and could go up as high as 175%. Furthermore, lawyers claim that $7 billion of Sony’s $17 billion revenue in the fiscal year that ended in March 31st came from overcharging for digital games.

Sony has yet to respond to calls for comment. As for the case itself, it has yet to achieve any sort of trial date and is currently only a proposed lawsuit.

sources: Bloomberg via VG247, Polygon
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SwordBreaker35

Well ghost of Tsushima is a good example on heavy price difference.
Here in Sweden the digital version of the game cost´s 739 Swedish kroner which is around 88.9 dollar.

Retail versions costs 549 to 599 Swedish kroner or 66 to 72 dollar.

And on USA PSN store the game costs 59.99 dollar which is for me 499 Swedish kroner.

The Weeb formerly known as Sray
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The Weeb formerly known as Sray

Something that seldom gets pointed out in these sorts of stories is that the overwhelming majority of these game related class actions never go anywhere. This isn’t even a lawsuit yet: it’s a proposal. Generally it’s a law office that is on a fishing expedition to see if there’s enough people who will sign on to make pursuing the action worthwhile; and generally there aren’t enough people who can prove that they’ve been affected to make it worth pursuing.

The fact that retailers themselves have never brought suit against Sony over this move likely indicates that their margin on digital codes probably isn’t much different than physical disc copies; which means that the end of digital codes likely had very little effect on their bottom line. At most, they probably jumped the gun on Sony’s PS5 sales embargo to give them the middle finger for the digital codes thing and that’s about all they’re likely to do.

Just my two cents.

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Schmidt.Capela

The fact that retailers themselves have never brought suit against Sony over this move likely indicates that their margin on digital codes probably isn’t much different than physical disc copies;

Back when the store I co-own used to sell game codes we would get a 5% cut; in truth we only sold those as a way to attract customers to the store so we could try to sell higher margin products to them, because a 5% cut wouldn’t pay for a kiosk, much less for a large-ish building with staff.

Caveat: it was a store with a single physical location, so pretty much a rounding error when compared with big chains or the large digital marketplaces. I bet something the size of Wallmart or Amazon could get a better deal.

Edit: also, we only had to pay for what we sold, so there was no incentive, at all, to sell codes cheaper to clear inventory.

Leo
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Leo

I think people are getting confused by this lawsuit. What is at play is those cards you could buy at stores with the download code. Many times stores sell them for less than what the game costs on the Playstation virtual store itself.

You can still buy these download codes for Switch games for example. And these are not just for games made by Nintendo, but games for that console.

So when Sony stopped allowing the sale of download codes for their console you could only pay their prices. So the price for consumers is higher than in a market were Sony competes with other retailers like Amazon or Gamestop.

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Arktouros

There’s no “competition” that’s going on however in the way you’re thinking. The fundamental difference here is a store (Amazon, Gamestop, Walmart, etc) end up with a physical product (the code) inventory they’re incentivized to sell/move and thus will sell for less just doesn’t exist with a digital storefront that generates a code on demand and thus has less incentive to sell for less.

A store would buy say 1000 game codes for GameA which it then sells in it’s shops. However over time lets say they still have 450 copies of the game codes but no one is buying it anymore so they lower the price. They don’t do this because they’re trying to be more “competitive” with the console store it’s because they have product and selling it for less is better than having it and no one buying it. That’s why most of the games on their list, as pointed out by Greaterdivinity, are very old games that people just interested in buying anymore.

The argument that the store selling the game at a loss just to move inventory is “normal” and that the digital store not doing that is “abusing it’s monopoly” is just a very poor/bad argument to make.

Leo
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Leo

Well not saying I think this lawsuit is a surefire win or anything. I just think many are looking at this from the store perspective and not the consumer perspective.

Like trying to buy a Nintendo game, on their virtual storefront the price remains typically high for years. On Amazon, for example, you can usually get it for cheaper. And the digital code is also cheaper.

So these folks are saying that this is leading to higher prices for consumers. And this will become especially relevant for consumers as Sony is selling a console that has no means for physical media and so can the games can only come from their store.

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Arktouros

Perspective is fundamentally irrelevant. What matters fundamentally is the price in one scenario is higher and the price in another scenario is lower. In order to explain that situation you have to examine the differences int he stores which is why people are talking about the differences in the stores.

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Greaterdivinity

Uh…where did they think those keys come from to begin with? Were they redeeming them like, somewhere other than the PlayStation Store after purchasing?

popular games are sold 75% more on the PlayStation store than physically

This is a bit confusing as it seems to imply more volume rather than higher price but looking at their table…

Retailers reduce price on stock to move inventory when it’s not moving, they’re eating into their cut to dump inventory here. There is no reason that digital titles should see similar reductions, there’s no “inventory problem” there. They also appear to be mixing pre-owned prices with “new” prices, which further undercuts their arguments.

Want to be more fair? Also do a comparison on sale prices, including how digital tiles are routinely deeply discounted (at least on non-Nintendo platforms) and frequently far cheaper than even pre-owned physical copies. I guess Sony could go the way of Nintendo and force retailers not to price-cut first party games at all and that might make the lawyers happier?

Retailers make a bad buy and overstock on retail copies for a game nobody is buying? Yeah, they’re gonna eventually drop the price low enough just to get rid of that inventory so they can use the shelf space for games that will actually sell. They’re eating a loss here for purely practical reasons.

This is why everyone laughs at class-action lawsuits. Because a lot of them are truly this stupid.

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McGuffn

Reading your comment I thought of Bethesda and perhaps a perverse reason they sold to Microsoft, along with gamepass, etc… is to prevent or mitigate another Fallout 76 situation where stores are sitting on piles of boxes and selling it for peanuts or are giving the game away shortly after launch.

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Greaterdivinity

Doubtful, FO76 hurt Bethesda but wasn’t bad enough to harm their ability to get retail sell-in. They have TONS of hugely successful games aside from 76, and like EA an occasional miss with a release isn’t going to send retailers running. FO4, Skyrim (x987234987234 releases), Doom Eternal etc. are all huge games that sell very well, and retailers aren’t going to be doing anything to harm their relationship with Bethesda to stock those titles moving forward.

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McGuffn

oh i don’t think it’s that likely either, at least as a main or compelling reason. but moving to a subscription model would do well for them, especially since they want to wring every last cent out of modding anyway. 10 dollars a month in perpetuity is better than 60 dollars or less you paid us 10 years ago.

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Greaterdivinity

It’ll be interesting to see if Microsoft does move ahead with any “Game Pass Exclusives”. There’s definitely potential there, but the backlash would be insane. They’ll need to do a lot to build momentum before making such a risky move that’s pretty clearly anti-consumer.

Right now they’re going hard on trying to win folks back after making a series (X…hue) of terrible decisions last generation. That’s why they’re doing all these big consumer friendly moves right now while Sony is just resting on their laurels.

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Arktouros

I’d really be interested in seeing how they came up with the 75-175% numbers. It’s not like a new release jumped suddenly from a $60 game to $105 or it’d be impossible not to hear people freaking out about it. They were discussing or decided upon a $70 increase and people were losing their minds.

They really just don’t make that much sense outside of comparing sales to non-sales figures for older titles. Like someone went through a bunch of old games that stores were selling for $7 in a discount bin section but through the store it’s still $10 and oh Lordy the price gouging!

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Greaterdivinity

Polygon has a link to the complaint, it compares a handful of titles that are largely well past launch (including sports titles that have a short shelf-life) to digital prices, mixing in pre-owned sale prices that aren’t applicable. It’s stupid and completely ignores the realities of retailers being allowed to have price control over their inventory and dropping prices to limit their losses on inventory that isn’t moving.

i.e. Madden 21 is $60 on PS Store, $20 at GameStop as it’s an annual release with a short shelf-life that they’ll need to dump inventory for before the next installment arrives.

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Eliandal

So wait.. a Lawsuit? Their games AND their store? Am I really that obtuse? I must be reading and or understanding something wrong!