Playstation 5 [PS5] [Release November 12 2020]

[Shifty Geezer]

Sony facing $7.9 bln mass lawsuit over PlayStation Store prices

Sony must face a mass lawsuit worth up to 6.3 billion pounds ($7.9 billion) over claims the PlayStation maker abused its dominant position leading to unfair prices for customers, a London tribunal ruled on Tuesday.

www.reuters.com

Potentially ouch. Sony requiring add-ons for games on PS5 must be bought in the PlayStation store is part of this.

Depending on how this goes, could affect other console makers as well as Apple and Google.

If Sony are found guilty, everyone else would have to be also going back to Nintendo charging a 30% fee for carts that only they could make. I can't see them winning. I also doubt 9 million people have signed up to prosecute Sony. And if they do and have, and they win their $8 billion, they'll kill PlayStation and have nothing at all going forwards!

Edit: Weren't 9 out of 10 Epic complaints against Apple dismissed? Okay, different case and different court and laws but principles of free market dynamics still the same.

From a Reddit AMA

This suit is actually being brought by a company (woodsford litigation funding) which only exists to profit from lawsuits like this.
They go around countries with lax litigation funding laws (they get to “self regulate” in the UK) filing speculative class action suits like this to make huge profits, and class action suits like this often leave class members with basically nothing except the headache of having to manually opt-out of the class to retain their rights.
They even campaigned against laws in Australia designed to ensure most of the funds from any class action settlement or judgement had to go to the class members.

Smells more like lawyers doing lawyer things. Alex Neill used to head Which? though so she might be legit. Can't find a decent history of her championing. The responses in that AMA are weak-sauce.

 

[Deleted member 11852]

If Sony are found guilty, everyone else would have to be also going back to Nintendo charging a 30% fee for carts that only they could make. I can't see them winning. I also doubt 9 million people have signed up to prosecute Sony. And if they do and have, and they win their $8 billion, they'll kill PlayStation and have nothing at all going forwards!

Consumer rights are statutory in the UK, the estimated 9 million PlayStation Store users do not have to do anything individually for a court to consider whether their rights have been abused.

This case has been going on for over year and this is just the latest development. Previous cases like this have been considered without merit because except for their own titles, Sony do not set the prices of games sold on their store that is down to publishers. The new argument here is that the 30% cut, which is the standard cut on almost all digital content platforms, is too high and forces developers and publishers to push their overall costs up to compensate.

Personally, I don't think taking 30% on the sale price of what could be a $59/$69/$79 title, that may have cost tens of hundreds of millions of pounds/dollars/euros to create, is acceptable because all of the risk is on the people making games.

This latest decision only means that this can be argued in court and I really hope the final decision is that 30% is too damn high and should be slashed. If Sony lose, the impact to digital platform economies operated by Sony, Microsoft, Nintendo, Apple, Google, and Valve will be massive, and the court will be mindful of that.

But being realistic, the challenge for those bringing the case will be proving that a thinner digital retailer cut will result in cheaper games for consumers rather than this just moving a cut of money from the retailer to the publisher. Just comparing average Epic Game Store to Steam store prices show that thinner digital cuts are rarely passed on to the consumer.

 

[Shifty Geezer]

Doesn't this case depend on Sony abusing its dominant position? That's why they've been singled out. Well, consumers have the option to game on other platforms if they don't like Sony's prices, all of which charge the same base rate. I don't see anything here that's different to normal free market economics. Much as I agree 30% is 'too much', we don't ever regulate how large the profit margins that companies are allowed. What are the insane prices car companies charge for extras?

Perhaps the most ludicrous part of the argument is the beseech to "cost of living crisis'.

I’m the proposed class representative for this lawsuit because I believe that massive businesses should not abuse their dominance, and Sony is costing millions of people who can't afford it, particularly when we're in the midst of a cost-of- living crisis and the consumer purse is being squeezed like never before.

If you are struggling with that additional £25 a year spend on downloadable content on your PS that Sony is overcharging, why are you buying video games at all?

It'd be better to go after Netflix and Amazon for their subscription fees as more people are affected and they keep putting them up.

 

[London Geezer]

Doesn't this case depend on Sony abusing its dominant position? That's why they've been singled out. Well, consumers have the option to game on other platforms if they don't like Sony's prices, all of which charge the same base rate. I don't see anything here that's different to normal free market economics. Much as I agree 30% is 'too much', we don't ever regulate how large the profit margins that companies are allowed. What are the insane prices car companies charge for extras?

Perhaps the most ludicrous part of the argument is the beseech to "cost of living crisis'.



If you are struggling with that additional £25 a year spend on downloadable content on your PS that Sony is overcharging, why are you buying video games at all?

It'd be better to go after Netflix and Amazon for their subscription fees as more people are affected and they keep putting them up.

I must say I also found that questionable wording. If you're "struggling during a cost of living crisis", then... don't spend your money on videogames?

 

[Nesh]

There goes the argument that the UK is deliberately targeting American companies and favoring others.

The argument doesn't make much sense considering this is standard practice from the whole market. Surely if Sony is overcharging then we have competitive choices too.

But are there?

Nintendo is "overcharging" for "lesser" versions of the same games when available, and most PS5 games are available on Xbox at the same price.

Videogames are a luxury in a very competitive market. So I don't understand how Sony is treated like a monopoly that specifically makes people's life harder in an economic crisis.

 

[wco81]

Console companies have been doing this same practice for decades.

The developers enter into these agreements willingly. They know from history that even after paying licensing fees, they can price the games high enough to profit on each sale and sell millions.

Plus console hardware has been subsidized by these games licensing deals.

Apple was the first target, from Epic, who signed onto the terms. But they saw Apple with all that money, though Sweeney himself isn’t exactly a pauper himself. They lost the civil suit and now go crying to regulators.

But if Apple can’t charge 30%, why would console companies be able to. the same dubious logic applies, Apple has monopoly on iOS games and apps and by that logic, any platform creator has monopolies. Sony has monopoly on PlayStation games licensing, Nintendo has monopoly on games licensing for their system, MS has monopoly on Xbox games licensing.

Of course that isn’t how antitrust regulation was conducted historically because they defined the market as every comparable platform. So it was the entire video games market as opposed to individual markets of each console platform.

EU got around this with DMA and DSA and the novel concept of gatekeepers. How convenient, none of the gatekeepers are EU companies.

EU missed out on having tech market giants the past 30 years or so. Now they hope AI will reset the technological order and maybe some EU companies will be among the global leaders in AI.

If that doesn’t happen, the companies which win in AI can expect the EU to come knocking on their doors.

Sometimes seems like EU was created mainly for protectionism.

 

[Deleted member 11852]

Doesn't this case depend on Sony abusing its dominant position? That's why they've been singled out.

It does, Sony have the largest video game digital market in the UK, it's bigger than Xbox, Nintendo and Steam, and that is why they are being targeted first.

Well, consumers have the option to game on other platforms if they don't like Sony's prices, all of which charge the same base rate. I don't see anything here that's different to normal free market economics. Much as I agree 30% is 'too much', we don't ever regulate how large the profit margins that companies are allowed. What are the insane prices car companies charge for extras?

In cases like this you cannot bring a single case against multiple parties, although you could bring multiple individual cases but that's pretty impractical. If Sony lose, the group will bring the same case against other digital market operators. It's all very well adopting a if-you-can't-afford-it-then-fuck-off stance but videogames are a massive market in the UK and if key companies are perceived to be grossly profiting with costs being passed on to consumers then that should be looked at. This is long overdue in my view.

The automotive market isn't a good analogy because there is so much more competition in terms of manufacturers, and you don't have to buy extras from the manufacturer, after market mods are what the automotive industry heavily promotes. Compared to Microsoft, Sony have completely locked down PSN as they are the only party that can issue codes for licences whereas Xbox codes can be obtained from other parties which is why that are tradable and available on sites like CDKeys.

 

[Shifty Geezer]

It does, Sony have the largest video game digital market in the UK, it's bigger than Xbox, Nintendo and Steam, and that is why they are being targeted first.

Individually, but not all together. PS is less than 50% of the total UK gaming market. Well, those numbers are hard to come by and depends what you're measuring, but given install bases and size of Steam I can't see Sony being a majority player or anything close to a monopoly.

In cases like this you cannot bring a single case against multiple parties, although you could bring multiple individual cases but that's pretty impractical. If Sony lose, the group will bring the same case against other digital market operators. It's all very well adopting a if-you-can't-afford-it-then-fuck-off stance but videogames are a massive market in the UK and if key companies are perceived to be grossly profiting with costs being passed on to consumers then that should be looked at. This is long overdue in my view.

If the problem is the whole industry, a case against one player isn't the normal approach. Normally the competitions authority checks them all for price fixing etc. It should be Sony, MS and Nintendo under investigation.

 

[Deleted member 11852]

Individually, but not all together. PS is less than 50% of the total UK gaming market. Well, those numbers are hard to come by and depends what you're measuring, but given install bases and size of Steam I can't see Sony being a majority player or anything close to a monopoly.

Of course, the group has simply targeted the single biggest videogame digital market operator. The difference between Valve/Steam and Sony/PSN is that Steam does not mandate payments go through them like Sony do. Third parties can accept payments and provide Steam-compatible codes which is fairly popular in the indie space for those who want to setup direct payment processing to save that 30% Steam sales cut.

Sony easily have the most locked-down market with the exception of possibly Apple, who the EU for forcing change upon.

If the problem is the whole industry, a case against one player isn't the normal approach. Normally the competitions authority checks them all for price fixing etc. It should be Sony, MS and Nintendo under investigation.

That's not how it works in the UK. I.e., there isn't a contingent of civil servants checking how companies and markets are operating, the Government has no mandate to do this. Investigations into market abuses begin with a specific allegation or complaint and that's what we are here.

 

[orangpelupa]

microsoft has blocked me from buying games from different region than my cards... i cant choose my own region as im in unsupported region....

so... i'll probaby join the ps5 family soon. as my region is supported by PS5.
hopefully in december sale i can grab a PS5 at a nice discount.

and knowing my luck, once i bought a PS5, microsoft will unblock me from purchasing games from different region again -_____-

 

[Shifty Geezer]

Of course, the group has simply targeted the single biggest videogame digital market operator.

Is that proven? What was Steam's UK takings over the past 20 years? What are Nintendo's online sales in the UK considering NSW outsells PS5? What about Apple and Google UK store revenues?

The difference between Valve/Steam and Sony/PSN is that Steam does not mandate payments go through them like Sony do. Third parties can accept payments and provide Steam-compatible codes which is fairly popular in the indie space for those who want to stout direct payment processing to save that 30% Steam sales cut.

Steam doesn't let you freely create and sell codes. You can, but you request them. If devs abuse that too much and they get zero cut from out-of-steam sales, they'd close it down. It's a small nicety by Steam to allow some codes but otherwise they are the same 30% off everything and that's what 99% of buyers have to pay. There's also MS, Nintendo, Google, etc. who don't allow any other sales vector

That's not how it works in the UK. I.e., there isn't a contingent of civil servants checking how companies and markets are operating, the Government has no mandate to do this. Investigations into market abuses begin with a specific allegation or complaint and that's what we are here.

I disagree. Consumers can contact the CMA directly and the CMA may choose to take action on their behalf. Class action lawsuits in the UK are very new and not standard process to redress industry-wide injustices. In this case, the class is 'all PS owners' without them all agreeing to it, and from comments on all coverage of this story, sounds like the vast majority don't agree with the complaint here that they are being overcharged. You have an individual taking it upon themselves to champion a bunch of other people who weren't looking for a champion, and lots of other people getting wealthy from the activity. That fits the new CPO process for an "opt-out" mass action, so its legal, but it's not the way the UK tries to balance corporate wrongdoings adn that fact firms engage in these sorts of legal processdings for profit doesn't sit well with true consumer advocacy.

Of course, the CPO may have been designed with this process in mind, to move regulation to private cases, but it's not a fair way to do things. All the industry players are the same here and none should be singled out. Any ruling against Sony should apply to everyone else, which this court hearing won't do. The most optimistic view is if they win here, they then repeat the process against everyone else and instigate indsutry change. That's still a wonky way to deal with industry wide 'price-fixing' though.

I also don't understand the thinking of how these companies should operate and someone needs to actually pin that down, a legal definition of 'fair'. If Sony wasn't the biggest player, then 30% fees and locking people in to one payment system is okay. But the moment a player does become dominant, that then becomes 'abuse of position'? So if Nintendo start to increase market share and dominate (what's the percentage market share that determines that threshold, and who's measuring it?), they have to start...what...reducing their fee and prices? To what, and why?

 

[Deleted member 11852]

Is that proven? What was Steam's UK takings over the past 20 years? What are Nintendo's online sales in the UK considering NSW outsells PS5? What about Apple and Google UK store revenues?

Although Valve did setup a company in the UK years ago, it's never operated as a going concern and is in the procedure for being shuttered. Ergo, Valve/Steam makes no money in the UK.

Steam doesn't let you freely create and sell codes. You can, but you request them.

I never said that, you can pay Steam a nominal amount for Steam codes for your title which you can do with as you wish. Like bundle codes with graphics cards or CPUs or whatever. The charge will vary, but from what various developers have said, it's lower than the 30% cut Steam takes and that is why indie's offer it all. If Valve still charged 30% and devs had to pay for payment processing, it wouldn't be worth it.

I disagree. Consumers can contact the CMA directly and the CMA may choose to take action on their behalf. Class action lawsuits in the UK are very new and not standard process to redress industry-wide injustices. In this case, the class is 'all PS owners' without them all agreeing to it, and from comments on all coverage of this story, sounds like the vast majority don't agree with the complaint here that they are being overcharged.

You can disagree all you like, but you're still wrong. Anybody can bring a complaint to CMA but the CMA will not automatically investigate all complaints. The complainant must first pass a burden of proof in terms of evidence of wrong-doing for any complaint to receive a formal level of investigation because otherwise the ability to set the regulator on companies like some rabid rottweiler could be abused for commercial gain.

And that is what has happened here, the original complain did not proceed and two days ago the Competition Appeals Tribunal ruled that the CMA got it wrong to not pursue this and ruled this case should be heard [links to the judgement], which sets out the process.

You have an individual taking it upon themselves to champion a bunch of other people who weren't looking for a champion, and lots of other people getting wealthy from the activity.

You said this before, and as I said before in the UK consumer rights are statutory which means that exist in law and must be complied with whether or not consumers are aware or complain. Once a potential abuse has been recognised, it should be investigated. The complainant has not brought any allegations for other digital market stores. Yet.

Of course, the CPO may have been designed with this process in mind, to move regulation to private cases, but it's not a fair way to do things. All the industry players are the same here and none should be singled out. Any ruling against Sony should apply to everyone else, which this court hearing won't do.

Courts can only rule on the evidence put before them. There is no evidence put forward relating to Microsoft, Nintendo, Apple or Google. Sony may use the 'standard industry practice' argument as a defence and draw them in, which is what happened in the civil Epic vs Apple case in the US, but right now this is about Sony.

 

[Shifty Geezer]

I never said that, you can pay Steam a nominal amount for Steam codes for your title which you can do with as you wish.

No, you can't. That's not how Steamkeys work. I was going to give details but technically they're under NDA via Steamworks. I'll just say there is no option to buy Steamkeys cheap from Valve, or even buy them at any price.

ruled that the CMA got it wrong to not pursue this and ruled this case should be heard

Where does it say that the CMA considered the case, didn't follow up, and were in the wrong?

...but right now this is about Sony.

I don't think this is about Sony at all, but about a litigation investment firm hoping to profit off the letter of the law, and lawyers keen to be paid big bucks no matter the outcome. I'm not convinced the consumers are there for anything other than an avenue for legal profiteering.

 

[Deleted member 11852]

No, you can't. That's not how Steamkeys work. I was going to give details but technically they're under NDA via Steamworks. I'll just say there is no option to buy Steamkeys cheap from Valve, or even buy them at any price.

I think what you mean is, Steam's standard T&C do not offer this, and it is specifically not available to you. Again, it's absolutely normal for codes to be mass distributed with hardware and even other software as an incentive. Ergo, it absolute is possible.

Most recently I bought The Universe from Cryptivo directly before it was in Steam Early Access, then when it got that far, Cryptivo provided everybody who bought direct with a Steam key. Aspyr, the Mac porting team, also offered this because I bought Settlers 7 (on Mac) directly from their store because at that time it wasn't on Steam, then when it became available I got the Steam key which also allowed me to download the Windows version, which at the time you couldn't eve buy on Steam because it was sold exclusively through Ubisoft's launcher.

Where does it say that the CMA considered the case, didn't follow up, and were in the wrong?

Apologies, I meant the CPO pre-assessment. Too much CMA drama already.

I don't think this is about Sony at all, but about a litigation investment firm hoping to profit off the letter of the law, and lawyers keen to be paid big bucks no matter the outcome. I'm not convinced the consumers are there for anything other than an avenue for legal profiteering.

This party doing all this work with the hope of taking a cut is a gamble on their part. If Sony were found to lose, the court could simply direct Sony to setup an escrow fund for claims or just compensate all PSN users a set amount in a settlement.

If you had a PS3 in 2011 you may recall that PSN hack that resulted in a US class-action lawsuit. However, before that case could be heard, Sony settled by agreeing to compensate all PSN users across multiple territories. There is no third-party litigate-to-win-costs principle in the UK, and the people bringing this case can only take a portion of any costs assigned on behalf of users that sign-up to be presented on their website (which I am not link).

In way, it's not much different to the accident claim ads I'm sure you've seen on TV, or the legal firms ad trying to take a cut of compensation that VW have to provide for misleading diesel vehicle emissions. They need explicit permission to represent individuals and if they don't have that, they really stand to gain very little unless the court happen to assign costs to them and those costs are inflated, but UK courts generally don't do this. They are almost certainly hoping Sony will settle with them, but that seems pretty unlikely.

 

[Johnny Awesome]

No one has a right to buy video games. It's ridiculous. If you don't like what Sony are charging, don't buy games and systems from them. If it's so easy and lucrative to be Sony, then go start your own console. The reality is that Sony needs these 30% margins to be able to fund hardware and software development. These entitled consumers should spend time working harder so they can afford the extra $100 worth of stuff every year. This lawsuit is complete nonsense.

 

[Globalisateur]

microsoft has blocked me from buying games from different region than my cards... i cant choose my own region as im in unsupported region....

so... i'll probaby join the ps5 family soon. as my region is supported by PS5.
hopefully in december sale i can grab a PS5 at a nice discount.

and knowing my luck, once i bought a PS5, microsoft will unblock me from purchasing games from different region again -_____-

At worst you'll have plenty of fun with Astro's Playroom, Demon's Souls and Ratchet and Clank.

 

[tuna]

But if Apple can’t charge 30%, why would console companies be able to.

You need a phone to live these days. You don't need a game console.

 

[Deleted member 11852]

No one has a right to buy video games. It's ridiculous.

You're right, but who is making the argument that people are entitled to videogames? The principle at stake here is that any product or service sold openly to the UK consumer market, should not be supporting unfair business practises. This case moving forward will give Sony the opportunity to explain why this is all OK. I'm looking forward to this because when companies like Apple, Google, Microsoft and Sony are forced to go to court, that's pretty much the only time we ever get an insight to the economics and business practices of the industry.

And in 100% related news, "Gabe Newell ordered to make in-person deposition for Valve v. Wolfire Games lawsuit".

I'm keeping an open mind on this whole thing, but when many games cost tens to hundreds of millions of dollars to create and market, and represent a massive investment risk, how does it make any sense that Apple, Google, Microsoft, Sony and Valve, take 30% of the sale price in perpetuity? Publishers and developers are are investing everything to create these games over a number of years, and just because a bunch of companies are created walled-gardens, or lucrative marketplaces, they get to take 30% of every sale?

That doesn't seem proportionate to me, although I know the economics of the industry - particularly in the console space - is complicated. So these are opportunities for the industry to explain why a 30% cut is reasonable. Seems fair, right?

 

[wco81]

You need a phone to live these days. You don't need a game console.

But you don't necessarily need apps.

Certainly not the millions of apps now available for smart phones.

What Apple and Google charge for apps to be on the app stores has certainly not impeded the ecosystems.

Remember, among the first developers to decide that he no longer wanted to pay 30% is Tim Sweeney, who became very rich selling apps and services through the app stores.

In his case, it wasn't that the fees made it impossible for him to compete. It was that he wasn't getting to harvest enough of the revenues for his taste.

Not to mention Fortnite and other Epic Games products are hardly necessary to live.

 

[Deleted member 11852]

@wco81 and the apps generally considered necessary (or even essential) for living, such as banking, monitoring and paying utilities, accessing public services and transport, are generally all free to begin with and Apple and Google make nothing off of these. Although that is divorced from the cost of owning a smartphone with a data plan or access to wifi to use it!

I've not read the argument from this group dragging Sony into court but none of the summaries I read indicated that part of the argument was that video games are a basic right or an entitlement. If this is indeed the case, then I'm very much in agreement with others in the I would disagree with this, although I'm sure there may be a small group for which videogames may be one of the few options for downtime and maintaining mental health. Even then I can't see how niche/edge cases can be representative of an entire