Sony, the Japanese tech giant and the maker of the popular PlayStation gaming consoles, is facing a massive class action lawsuit over the prices of its digital games on the PlayStation Store. The lawsuit, filed by a group of consumers in the US, alleges that Sony has created an unlawful monopoly by preventing third-party retailers from selling digital download codes for PlayStation games, forcing customers to buy them only from the PlayStation Store at inflated prices.
The lawsuit claims that Sony’s monopoly on digital games 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. The lawsuit cites examples of games that cost up to 175% more on the PlayStation Store than on physical discs, such as NBA 2K21, which costs $69.99 on the PlayStation Store and $39.99 on a disc, and Call of Duty: Black Ops Cold War, which costs $69.99 on the PlayStation Store and $59.99 on a disc.
The lawsuit also points out that Sony stopped allowing third-party retailers, such as Amazon, Walmart, and Best Buy, from selling digital download codes for PlayStation games in 2019, effectively eliminating any competition and price comparison for digital games. The lawsuit argues that this practice violates the Sherman Antitrust Act and the California Cartwright Act, and seeks to represent a class of all US consumers who purchased a digital game from the PlayStation Store since April 1, 2019. The lawsuit estimates that the class could include more than 30 million people, and seeks damages of $7.9 billion, or three times the amount of Sony’s overcharges.
Sony’s Response and Implications
Sony has not yet commented on the lawsuit, which was filed on May 5, 2021, in the US District Court for the Northern District of California. However, Sony may argue that its pricing strategy is justified by the costs and benefits of digital distribution, such as convenience, security, and environmental impact. Sony may also contend that it faces competition from other gaming platforms, such as Microsoft’s Xbox, Nintendo’s Switch, and PC gaming, and that consumers have the choice to buy physical games or switch to other devices.
The outcome of the lawsuit could have significant implications for the gaming industry, as digital sales have become increasingly dominant in recent years, especially during the COVID-19 pandemic. According to Sony’s financial reports, digital sales accounted for 62% of its game sales in the fiscal year 2020, up from 55% in the previous year. If the lawsuit succeeds, Sony may have to lower its prices, refund its customers, or allow third-party retailers to sell digital games again. This could also affect other gaming companies that have similar practices, such as Nintendo, which also stopped allowing European retailers from selling digital codes for its games in 2020.
