Sony facing $7.9B mass lawsuit over Playstation Store prices | Hacker News Reader

Sony facing $7.9B mass lawsuit over Playstation Store prices

reuters.com

45 pointstoblaroni62 comments

Compared the apple vs epic case this time the angle seem to be from consumer side with an added argument "consumer would pay less if Sony made less margin" which is technically correct but is absolutely insane from a business angle.

That's basically claiming business shouldn't be able to set their price if their margin is deemed unfair... which is a pretty daring claim. While regulation on pricing could be interesting it's not exactly a judge job and it would be a bit counter current with how the world economy currently work.

As for the whole "closed ecosystem" part this have been debated thousand of time already, nothing new here except I'm not sure it was attempted in UK yet.

Yeah this lawsuit doesn't have a chance but I do think there's an interesting observation in there that these platforms aren't price takers like they ought to be in a more competitive market. I don't think anyone expects there to be perfect competition but the pricing power Sony and others enjoy to just set their margin I think is indicative that something has gone wrong.

This analysis doesn't seem right to me, let me try to think it through. It seems more like "the business is blocking competition from selling at lower prices". The problem in question here is actually the playstation "store".

I'm trying to find a good analogy. Say we're in the early NES days (no online stores, just physical). Nintendo gets a margin on games, because presumably game developers have to pay them for dev kits or some such to make an NES game. The game devs (distributors, publishers, whatever) then sell the game to the stores for some price that gives them a margin. Then the stores add their margin on and sell it to customers. Three margins in there, from there different businesses that have competitors, so they try to keep their margins competitive.

Now let's say Nintendo made a deal with Toys R Us such that NES games could only be sold there, no other stores. Assuming that didn't destroy demand for NES games, Toy's R Us could then ramp up their margins to whatever they want, because there's no other option to consumers. Unfair advantage? Stifling competition?

With Sony, they own the store, and have ensured there's only one. So they get to leverage the same advantage as above. Is it unfair?

Much, much bigger fish have argued this and failed, most notably Epic vs. Apple [1]. (Although there's a separate Epic vs. Google, which I was not clear on [2]; I had those conflated in my mind, which the process of digging up links has now cleared out.)

I won't conclude that the case is hopeless but I can definitely say that the companies will defend this to the hilt, and this does strike me as very weak coming from the consumer, who has the option to not buy and also for the most part buy elsewhere on different platforms. You're not being forced to buy things at higher prices than you want, and games are not anything resembling a human right. Epic's case strikes me as stronger for the developers being hurt by the gouging.

[1]: https://www.theverge.com/2021/9/10/22667769/apple-epic-lost-...

[2]: https://www.theverge.com/23944251/epic-google-antitrust-tria...

> Much, much bigger fish have argued this and failed

True, but this is a different jurisdiction. Is there any equivalent case you can point to in the UK?

I'm aware of that, which is why you may note my last paragraph did not actually make any arguments based on precedent, instead using the court cases to observe that the companies have a history of hitting this with everything they have.

But they are under common law as the US is, so pointing out that the customer complaint about being damaged strikes me as rather weak and much weaker than the developer's complaints is still valid in their system. I can't complain that Maserati are making way more profits than they should because they're charging high prices on their luxury goods. They could demand 10 times the price and I'm still not being damaged. It's their prerogative. Games are luxury goods too and if Sony wanted to sell them for 10x more, the remedy is to not buy them, and that's generally a much more competitive market where customers have a lot of other options too, e.g., most of the games being "overpriced" on PS5 are also available on at least one other platform, if not 3.

In this case the claim rests on section 18 of the Competition Act 1998 [1] and Article 102 of the Treaty on the Functioning of the European Union [2], which still applies post-brexit. Both relate to abuse of a dominant market position to charge “unfair” prices.

The judgement granting a Collective Proceedings Order is at [3].

It’s worth noting that this CPO (class action equivalent) regime in the UK is still developing its case law, having been dramatically expanded in a landmark 2020 case [4]. That case and the judgement implies that the merits of this case are largely untested by the court, so the fact that a CPO was granted doesn’t say all that much about whether Sony will lose.

[1] https://www.legislation.gov.uk/ukpga/1998/41/section/18

[2] https://www.legislation.gov.uk/eut/teec/article/102

[3] https://www.catribunal.org.uk/sites/cat/files/2023-11/152777...

[4] https://my.slaughterandmay.com/insights/briefings/uk-collect...

This seems ridiculous. Sony sells consoles at a loss and makes it money on game sales etc. If this succeeds that will kill that business model and who benefits from that?

The $499 PS5 is not sold at a loss:

https://www.theverge.com/2021/8/4/22609150/sony-playstation-...

Consoles are often sold at a loss initially but quickly become profitable as hardware costs fall.

The razor-and-blades model isn't as ubiquitous as you might believe.

Commented below, but applies this too, at console launch gamers get a Great piece of kit subsidized by the manufacturer's bet that they can make the money back on games. Equivalent spec pcs cost way more.

For years this model has worked great in physical media sales, I don't have a problem with it in online media.

If we want companies like Sony to produce consoles they need a way to make them profitable. It's an extremely risky investment with no guarantee of success.

Lastly if 30 percent is "unfair" developers would not use the platform. But they do. Same for consumers. If all parties in this didn't derive value they wouldn't trade with each other.

> Lastly if 30 percent is "unfair" developers would not use the platform. But they do. Same for consumers.

My PS3 was my last console for this reason. Developers pay the publishing charge and make up the loss with micro-transactions or shallow GOTY editions. In cases where they don't add tedious amounts of "grind" mechanics to extend gameplay time, they'll just make them multiplayer-centric.

The whole thing has become a racket.

Precisely.

Sure, considering the platform-game paradigm different products sources cross subsidize one another a different stages of their life cycles. This is just how firms work, and is often mostly a matter of accounting.

Alternatively, the goods can have different taxes applied as well.

I think it yo-yos because eventually they cut the cost of hardware over its life cycle. On average I think consoles are sold at break even.

If Sony is forced to allow alternative stores on PlayStation with different pricing, so they actually have to compete, then the consumers benefit.

Nobody benefits if the game consoles get commoditised like PCs. In the long run it would become an unattractive business like PC and people will just buy PCs if the prices become similar for the spec.

>if the game consoles get commoditised like PCs

That might be bad for Sony share holders (to a degree) but it's excellent in general.

I would definitely disagree and I think you can look squarely at appliances like "Smart" TVs as an example of a more obvious future with the commoditization. It'll basically turn into fast-fashion. Drop a new console with the latest features and OS, stop supporting it, move on to the next one. Etc.

Microsoft, Sony, and Nintendo have done in my opinion a great job in the gaming sphere by producing pretty good quality consoles at affordable prices. Certainly there is room for improvement, but this continued assault seeking to "commoditize" everything from iOS to Playstation just ensures that it turns to shit.

Commoditization isn't a moral good, neither is open-source.

Which begs the question: why do people buy consoles at all? Why don't they buy PCs? I have never owned nor seen the attraction of a gaming console as opposed to a general PC.

Even with all the improvements in the last couple of decades, PC gaming is a much more tinkery, finicky, and even error prone experience than console gaming is.

You’ve got to contend with the mess that is Windows (Linux is improving but is even more tinkery) and its idiosyncrasies, keeping drivers up to date in some cases and rolling them back in others depending on what the driver update improves/breaks. You’ve got to know what makes a gaming PC good so you don’t get ripped off with some giant overpriced ball of aggressively angled plastic and LEDs with terrible airflow. You’ve gotta know to wipe and reinstall clean Windows or at least how to remove bloatware. And if you really want to get the most out of the experience, you need to know how to build a PC and how to set up RAM speeds in BIOS and all that. And even after all that, there’s a decent chance you’ll come home from work hoping to fire up your favorite game only to find that some combination of factors has broken it, leaving you SOL until the game gets another update or you dive under the hood to fix it yourself.

Meanwhile with e.g. a PS5 you just buy it, put it on your TV stand, plug it in, and boot it up. Boom, it’s running your games optimally, no knowledge or tinkering required. It doesn’t randomly break, it reliably just works.

I have a custom gaming tower and it’s nice to have but damn if it isn’t a pain in the rear from time to time. I can absolutely see the appeal in something more plug and play even at the cost of some performance.

A few: cheaper, takes less space, don't need to know what cpu/gpu you need to buy, it just works, don't need to look for game hardware reqs

The older I get and the less time I have to tinker with PC, the more I appreciate consoles

you end up waiting for console updates

While the console still has to do updates, their sleep mode makes even those fairly painless for an end user.

Much cheaper, much smaller, much easier to set up and use and trust it'll all just work.

If you've already got a basic laptop you use for everything else, and are just looking for a normal gaming experience (not modding or cheating or maxing out graphics), why would you buy a PC instead? It's all downsides.

(If you don't have a laptop and already do all your computing on a PC desktop then using that for gaming makes more sense. But even then, your desktop is often in your home office while you want to do your gaming on your big-screen TV -- so you still get a console.)

I think the biggest implied benefit is sailing the high seas (cough cough) and the low price of Steam deals.

For me, sure, Steam prices are great; but the fact that it can be taken away from me for any reason and I can never sell/give any item means I’m basically buying… what, exactly? It feels like buying an IOU for a game.

As for piracy, well, I don’t think I need say more.

Ah, I suppose that would make sense.

On the other hand, for people who can't afford a ton of games but want to play a ton of games, Xbox Game Pass has been huge.

I actually wonder if Game Pass has had any effect in reducing piracy the way Spotify had a gigantic effect on music piracy. Or if Game Pass and pirates are distinct groups without much overlap.

If I've got a laptop and am looking for "normal" gaming experiences, rather than the latest AAA games, I'll load up an old or light game on it.

Why would I buy a separate piece of hardware taking up more space in my home and life? More money down the drain.

Sure, it's nice that it "just works", but so does `pacman -Sy xonotic`.

Nobody's talking exclusively about the "latest AAA games".

But they are generally referring to the graphics-intensive games that have been available on consoles for the past ten years. That's what "normal gaming" is. CoD, GTA, Halo. Mainstream multiplayer stuff and similar single-player.

Not one of which runs on an average laptop.

People buy consoles to run console-type games.

In the conversation around PCs vs consoles, I think you know nobody's talking about Pac-Man here.

Well, I’ll give you my logic, why I collect for the Nintendo Switch.

I inherited an Atari and small NES game collection from my grandparents. They’re games about ~35-45 years old. When my grandparents bought those games, and when my mother was playing them, handing them on to the next generation certainly wasn’t a consideration - but that day came.

Now imagine yourself 35 years from now. That Steam game that was delisted 25 years ago, barely runs on Windows whatever-it-is, and can’t be transferred, isn’t going to be a very viable option.

And that’s just the beginning. I get a mountain of joy from loaning titles to friends and family. Often, more than even playing the game itself. Not happening with Steam.

You might say, “just go pirate.” To which I say, you seriously expect a free and open internet in 35 years at this rate?

Have fun building a 4k ray tracing capable PC for $500. The GPU alone is going to cost you that much.

Plus while steam big picture mode is possible, it's kind of a pain compared to the simplicity of hooking up a console right to your big screen TV.

Because at launch you get a very attraction value proposition, a very high end piece of kit priced way below equivalent pc specs. Also developers tend to squeeze more and more out of this hardware as it ages, unlike pcs where hardware upgrades are often required sooner.

I can't play games as much as I used to (being a parent leaves little free time). But when I did I owned pcs and consoles. I don't think I'm biased on the issue. I enjoy both. But none of my friends played pc games, they weren't into tinkering etc.

I buy consoles instead of gaming on PC because I know I can buy a console and it'll work with new games for the next 5+ years. When I started playing games a PC would need to be upgraded multiple times in the console lifespan to continue to play new games well.

Developers, because for the most part it is a single piece of hardware to support and extract the best performance from.

Users, just plug and play, without caring about drivers, and thousand of other stuff a regular OS is full with.

If Apple isn't forced to allow other stores why would Sony be?

This looks like it's about to change, at least in the EU.

>Sony sells consoles at a loss and makes it money on game sales etc.

So you are saying that they are engaging in anti-competitive practices. Also at $500, it's unlikely a loss.

Pretty sure it's 550 now, price went up a while ago.

Ahh well, at that price point, I guess one can just get a similar new PC with way better spec - e.g. intel 12400 on 660B + amd 7600xt + 32gb ram + 2TB ssd + case/psu is around $600 new, entirely retail (newegg) price. It does not include keyboard/mouse/gamepad, but thing has 44GB of combined memory (compared to the 16 of ps5). It's a pretty decent machine for everyday use.

Selling something at a loss to make money elsewhere is not inherently anti-competitive in many locations. Depends on where you are.

>Depends on where you are.

The filed case is in the UK. So there is that. It applies to the EU as well.

> If this succeeds that will kill that business model and who benefits from that?

Everyone. They shouldn't be allowed to price dump computer components so they can charge fat margins by enforcing DRM. They shouldn't even be allowed to own the platform at all. The EU should hit these video game companies with the same laws they're going to hit Google and Apple with. Gotta put an end to their little digital fiefdoms.

Careful what you wish for. If Sony can't profit from license fees for games on its console then there is no incentive to create the console in the first place.

Realistically, most people won't install another store. And if that prediction doesn't come true, then Sony will stop selling hardware at a loss, so the people who benefit would be people who buy a lot of games.

And in any case, console manufacturers aren't "owed" a razor-and-blades business model.

Frankly I think they can allow this without hurting their business. I mean “allowing other stores” was the default before online stores - i.e. vast majority of games used to be sold by retailers that aren’t Sony.

How does Sony/Nintendo/Sega make money back in the day? Royalty fees. Every copy of a game sold on their platform, they get 10-20%. If you refuse then you don’t publish at all - all consoles have lockout mechanisms; NES/SNES has a lockout chip you can only get from Nintendo, modern consoles require all executables to be digitally signed or they won’t run and guess who has the keys, …

Apple would be hurt by allowing alt stores though since they don’t charge royalties. But if forced to open up iOS to alt stores, I think they will start charging royalties like consoles do.

> kill that business model

That's not really their business model. Sony has never sold a console that, over the life of the product, has lost money on hardware. Microsoft may have with the XBox and their red ring problem, but that's not really relevant to this discussion.

Who benefits? Consumers mostly. Sony likes that model because it is more profitable for them. It also raises a barrier to competitors. If everybody else sells hardware at a loss, it makes it more difficult to launch a new console.

No business model is more important than upholding consumer rights and preventing anticompetitive behavior.

No business model has a Constitutional right to exist, period.

> The claim alleges customers have therefore paid higher prices for games and add-on content than they would have done.

It's always fun when they try to use us as an excuse for their lawsuit.

The Playstation Store prices are pretty famously cheap. New titles are consistently priced at the typical price points. And they deeply discount stuff all the time. You can get premium games for 75-90% off almost any day of the week (though this feels closer to 50-70% these days).

If this was a lawsuit against Nintendo, their complaints might resonate with me. Nintendo never really puts anything on sale and when they do it's barely a scratch. Indie titles are consistently overpriced on the Nintendo store.

Well..the Sony Ponys sure hope this dies quietly. Sony may lead console share, but thats only good for revenue. Their profit margins are on the storefront.. and their buiness would be nonviable if they where to lose the gouging on that store. Couldent happen to nicer people. Look forward to seeing this progress as sony is slowly assimilated by trillion doller players.

Ps5 games are Usally more expensive than Xbox. If you only play multi platform games buy the Xbox

I've never found this to be the case. The big titles are usually $70 USD new, and it's easier to find physical copies of PS4 and PS5 games because Microsoft has been focusing on digital-only as of late.

I've been buying games digitally for about 3 generations and I've found the pricing across all game stores to be the same or cheaper than buying physical on balance. But I don't ever pay full price for a game and I use tracking websites.

FWIW I have the opposite experience, I never buy digital playstation games unless I'm forced to because they all sell for MSRP in New Zealand ($129/$139 NZD), whereas I can always get them physically for $99/$109 brand new. I would much prefer to buy digital games, but I'm not paying an extra $30 for the privilege of saving someone _else_ money

>I've been buying games digitally for about 3 generations

Of people, cars, or - i presume, games: but how are the generations defined? Sorry, not a gamer and never heard such a phrase.

Console generations; Playstation 5 is a generation after Playstation 4, with Playstation 3 before that. There are rough equivalents on the Nintendo and Xbox side, but Playstation numbering makes generation identification easier.

Yup. Using playstation as the spine its a little easier though not complete to base console generations off of.

When I think ps1: Sega Saturn, and a few others. Ps2 has Dreamcast, Xbox, Gamecube. Ps3 has 360 and Wii etc.

Though there is a chance that this will be the last generation of this and that there will be universal platforms instead of consoles for at least Xbox and probably Playstation.

Why make a console that I lose money on when I can sell you a $100 controller and a subscription to our cloud service instead.

I honestly don't have a strong position on app stores being exclusive or not -- I see pros and cons on both sides.

But I do find it ridiculous that a lot of people (including lawmakers) want to force Apple to open its store, but defend Sony/Xbox.

No. From a legal standpoint, there's no good reason to treat a $499 consumer CPU+GPU device differently, depending on whether it sits in your pocket or under your TV.

If you support government-mandated third-party app stores for your iPhone, you should support them for PS and Xbox as well.

I agree. The whole model stinks - whether it's apps, games, books, or anything else digital. Stores should be open to competition, end of.

Why though? If I build a big fancy shopping mall should I let business owners use units rent free? I’ve paid construction costs, electricity, taken the risk etc, so it’s obvious I should be able to profit from tenants otherwise I wouldn’t have built the thing in the first place. If you don’t like how I’ve built my mall you can go to the Xbox mall next door, or the PC slums where you are free to do whatever you like.

But you really can't just "go to the mall next door", since your faithful customers cannot follow you and your entire merchandise has to be remade from scratch.

For that reason, no real mall-owner ever can even dream of extracting 30% from every sale. Why can Apple/Google/Sony/Microsoft/Nintendo get away with it? Because they don't suffer competitive pressure in the same amount. Most of them are effective monopolies in their segments, thanks to network effects, so they can get away with the worst type of feudal rent-extraction.

They do extract money from every sale… if rent was free the companies would be way more profitable as a major cost is removed. To put it another way, if you open a physical shop the first X% of your sales every day go only to costs and you must reach a certain amount of sales before your shop is profitable.

Of course, but it's a fixed cost that, if the shop is even mildly successful, will quickly become a single-digit percentage. London retail space (most expensive in UK, of course) goes for around £50 per square feet p/y, with revenues that will easily go 5x to 70x that. Elsewhere the difference is even higher. Which is why the richest companies in the world are the ones running appstores, not the ones holding retail properties: because they can get away with unescapable feudal rents that would not be tolerated in meatspace.

I guess the analogy kind of falls down as a physical business owner and move and setup somewhere else, but then they won’t have access to the mall’s traffic… actually I guess this kind of still holds up

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