Sony Facing £5 Billion Class Action Lawsuit Over PlayStation Store Prices - News
by William D'Angelo , posted on 01 December 2023 / 11,458 Views
Sony is facing a class action lawsuit that is accusing Sony Interactive Entertainment of overcharging content on the PlayStation Store by up to £5 billion.
The UK specialist competition court has ruled the claim, brought by consumer rights expert Alex Neill on behalf of 8.9 million PlayStation customers, can go ahead to trial.
The lawsuit was first filed in August 2022 and claims "alleging Sony has abused its dominant position in the market by charging excessive prices to its customers for games and in-app purchases." The Competition Appeal Tribunal (CAT) in the UK granted approval today for Class Representative Neill to go to trial.
“This is the first step in ensuring consumers get back what they’re owed as a result of Sony breaking the law. Playstation gamers’ loyalty has been taken advantage of by Sony who have been charging them excessive prices for years," said Neill.
"It is significant that the competition court has recognised Sony must explain its actions by ordering them to trial. With this action we are seeking to put a stop to this unlawful conduct and ensure customers are compensated."
The class action lawsuit included anyone who lived in the UK and bought content on the PlayStation Store between August 19, 2016, and August 19, 2022, unless they choose to opt out. If the suit is successful it is estimated each class member will get £67 and £562, before interest. However, this could take several years.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
More Articles
Good luck, they are charging the same price everyone else is charging.
I'm actually wondering what is meant by Sony charging excessive prices. As far as I'm aware everyone is charging the same price for these games on their digital stores?
Got to start somewhere I suppose and see where it ends up also they most likely are using the anti Sony sentiment that has arisen lately with their pricing policies especially those concerning PS plus.
Market leader who prioreed both Software and Hardware price rises which opened the flood gates for the entire industry to follow...
Maybe thats why.
Well, as per Jan - June this year Xbox + Activision revenue is greater than PS. So probably won't be the "leader" for long
Maybe but it does not change what they did and what this lawsuit is about
sad sony led with ps4 and now with ps5 it is money hungar. Mabey will lead with 6 etc
And the price of their game on the PSN is MSRP that is also the one on the retail (that is they can give discounts if they want, and is an alternative to buying in the PSN, so they can't really claim Sony prevent lower prices at large). So I could see a claim for "monopoly", I could see a claim for closed environment, and some others but for over charging doesn't make sense.
I remember when digital was supposed to make games cheaper, but it's done the opposite.
I don't think it was ever supposed to make games cheaper, except for possibly relatively few exceptions. I always thought it was just an excuse to make it easier for gamers to accept, although I did give it the benefit of doubt.
When digital first came in the cost benefits not being passed on, was put down to the need for parity between bricks and mortar with the spin being based around we are doing so to not harm retail, but the truth was parity was a no brainer and not just because digital was still in its infancy with uncertainty around the eventual percentage of overall sales digital would end up with, and retail still held sway at that time so needed to be assuaged, but more importantly it presented the opportunity of gaining the full 30% margin boost in the guise of supporting retail, but as time as gone on and digital has grown this policy hasn't shifted and even blind freddy could see that being the outcome since giving up a margin that comes without having to bearing all the costs of retail is a hard habit to break at any time and even more so when it's gone on for so long that your customers have gotten so used to it its become the norm.
That is because there were no cost benefits. In other words you selling digital on someone else store front means that storefront gets a cut of the sales just like retail. The belief of customers thought this would be true but it never was in the beginning and its never going to be in the future. The only thing digital provides is a copy of a game you can get without a disc.
The industry were explaining why they added the 30% margin when coming up with the digital store pricing and they said it was to maintain
parity, and so not harm retail by undercutting them, the counter argument wasn't one of no margin since there are digital costs to be considered but was around keeping the same margin without having to carry the extra costs associated with retail, especially since their argument at that time being about doing so with the need to protect retail showed that they were indeed benefiting from not passing on part of the 30%.
PS I have edited my previous post to make it more clear that the retail margin wasn't all free money and there was a cost involved.
I don't think it was ever promised, at most it was expected by some customers. Corporations work to maximize profit.
look at what happned with streaming bro
The case seems to be about Sony being too dominant in their own ecosystem? Okay? And charging too much? How is that determined and by who? Compared to what platforms? There's also the fact that people can buy games wherever they want, not everything is digital only. Besides, prices will always go down as time goes, if you want to pay for day one, that's your choice. The time period this suit is focusing on is also oddly specific. Or maybe they had to pick a certain period of time for some legal reasons I guess.
I don't know about this one, but if it's successful, it will be a major precedent for the whole industry.
Absolutely absurd. AAA games were priced $50 in the 1990's. $50 in 1995 would be $102.50 today. Games are cheaper now than decades ago. People are so ignorant of history, it's baffling.
I'm pretty sure they didn't have digital back in those days
Even if games nowadays only sold digital, and cut out manufacturing costs altogether for physical (which they don't), it wouldn't save them half the money, so either way we are getting games cheaper than we did in the 1990's.
If a base game isn't good enough, don't buy it. If it is, and it has dlc later, simply don't buy it. No one is forcing you to pay beyond a base game. Goodness, with Gamepass you don't even have to pay the full name game price now for many games. I pay $15 a month for more games than I even have time to play (and I easily get my money's worth).
Different circumstances. Certain things have gotten cheaper over time and economic changes.
That would be the case if the Industry wasn't making record profits and the financial model was still built around rrp pricing, but that ship has sailed and rrp is no longer the bread and butter of gaming, instead Like pikashoe has mentioned ecosystems full of subscriptions and gaas etc have become the economic drivers.
But the industry isn't making record profits. Look at Epic. Because they cut their cut for their storefront, it has yet to make a profit. If anything, Epic storefront probably would be used in this case because if cutting your cut of game sales prevent you from actually making a profit then its evident that the current cut is not to much.
When as Epic been the industry, and their loss leading policy is of their own making in a bid to grab market share from Steam
You not getting the point. As far as this lawsuit is concerned the angle its going for does not hold water. Also with numerous layoffs and devs closing it shows that the industry as a whole is not making record profits unless you are one of the big dogs. Even still, there is nothing that says you have to purchase any particular product.
many people do not understnad that.
im defiantly against this, but i do not own sony stock so ill take the lower cost if it happens (really hope the lawsuit is dismissed)
We've had this before, it's nearly a year old and gone nowhere. Is he doing it for gamers or himself to make a name?
Games RRPs and in app purchase prices are set up by publishers, infact doubt Sony have any control of in app purchases. When are they taking MS, Apple, Google and Nintendo to court to for doing the same thing? or is it just because they are dominant in the console market (not mobile) and an easy target.
Please target Nintendo as well. Games could be found for cheap in the previous eras but not they like never go under 30%... CRAZY
I can sort of see where they're coming from with Sony charging significantly more in £ and € than they do in dollars, honestly I'd love to see that change, but ultimately they only set the prices for 1st party games so the premise of this lawsuit seemingly blaming them for all prices on their storefront is a bit ridiculous.
A good (and most) portion of this difference is due to taxes already being factored into the UK/EU price but not into USA price (you pay the tax at the counter) the other part is mostly exchange variation so there isn't much of a case here.
Places were they would really "overcharge" are places like Brazil, Argentina, etc but on these places import taxes covers most of the difference as well.
The tax alone doesn't quite excuse it when the dollar is worth significantly less which is has been for most of the last 20 years. Nintendo are reasonable about it charging both 60 in euros or dollars, they might make a little bit less in europe as a result, but Sony probably makes a little bit more.
UK price for most games end up less in the UK due to VAT. £70 on their games, 20% is VAT, that's £14., so £56 to Sony and the Publisher/Dev. Current exchange range puts £56 at $69.81. 17cents cheaper than US RRP. Obviously this is based on exchange rates now. The exchange rate has swung 1.7 a decade ago to 1.1 just last year. No company can be expected to constantly change their pricing to adjust for how well or bad an economy is doing.
This is a UK lawsuit however, I might add, Euro and Dollar are closer in exchange than dollar vs pound, once even being a 1 to 1 (same cost means US was the better market). And while in EU Nintendo might charge the same in $ to Euro, it charges £10 less, which is exactly that Sony in the same markets.
Don't get the last part, Sony charges 10 less in UK than Europe sure, but not compared to the US. Nintendo games are £20 cheaper and €20 cheaper than PS, while only being $10 cheaper (except TotK).
Different companies charge different amount for their games but their relative prices are comparable. Mario Wonder is £50 including tax, 60Euro including tax and $60 not including tax, if anything Nintendo is over charging the US by $10.
Lol. Also their relative prices are different that's the entire point. Ignoring currencies Sony charges 1x in the UK and 1.15x in Europe while Nintendo charges 0.83x in the UK and 1x in Europe for full price releases.
Why did you reverse it like that? Sony charge 1xUK and 1.15xEU, Nintendo charge 1xUK and1.2xEU. Nintendo adding more for EU than Sony. Nintendo not looking good here Seem to charge more in other regions than the UK. ;-)
Lol, sure. Actually Sony are quite generous since they only charge you 0.875x in US and UK (compared to euro ofc), while Nintendo charges 1.2x in US and Europe (compared to pound obviously). Greedy Ninty.
It's been happening since last year and nothing happened, don't think this will go through.
The best this lawsuit can do is force Sony to sell digital games in other frontstores.
Anyone that knows, knows the prices of games over the years. Then again the thing could also be 'but but it's 1 storefront not many' and well sure but eh. We'd have problems too.
Do I think their high sure but we had plenty of $50-60-70 or other regions pricing (for me the $80 first party Switch games, $70 remasters, PS/Xbox $100-120 standard or limited), fair third party price reductions.
Had $100 PS3 still got the stickers on them at launch, as a reminder then faded receipts.
Compared to my what $5 second hand now or whatever the case of additions, consoles and more for second hand. Got Wii U for $50 after main lifecycle dates, one second hand retro game story $60, others $10, $15.
Have paid $60-70 for some slightly discounted PS4 in lifecycle nowadays $28-$38-$50 or so depending in EB bargain bins but still launch prices are the same or $10 cheaper then PS5 physical but I get them later after a few months for cheaper, bought some full price launch $50 for Clive and Wrench, to Ratchet 2016 movie game.
People paid $60 for Assassin's Creed Mirage even. So some examples exist of lesser priced games at launch from AAA, and some Indie like $50 Clive n Wrench or Kao the Kangaroo 2022 at launch physical.
So digital yes prices vary for sure higher or lower or the same and whatever sales.
For discounts/sales I'd say sure the Black Friday deals were pretty eh of varying percentages off games wise at least, DLC mixed in always.
Finally this is being addressed but i never saw this being an issue on steam.
"Clout-Chasing Attourney seeks to make his name on absurd Legal Battle"
- fixed that for ya.
Quite honestly, this is a nonsense lawsuit. Companies set the prices they think people will pay. Consumers will either pay it, or go elsewhere. There is nothing wrong with that.
It's not like there are not any other options for consumers (PC, Xbox, Switch).
This is basically a cash grab hoping Sony will settle but there is no reason for Sony to settle because there is absolutely no meat to it. Epic tried this with Apple and it failed so the chances of this succeeding is even less. Basically they are saying because Sony takes their 30% cut for sales on their store front its the reason games are higher. That would only be relevant if store prices were higher than retail or any other storefront which its not. I guess the big amount is all that is making this waste of court time news worthy or pretty much every one would not even bother to report it.
EPIC didn't completely fail though, the EU/UK are after closed platforms. EPIC and MS will have their own stores on iPhone sooner than later.
We will see, I am not so optismistic on that but even still, this particular part of the lawsuit did fail. There no basis of saying Sony cut is driving high prices on their store front just like it was not relevant in the Epic lawsuit. Also since Epic cannot even get their store front to be profitable, it can be used that having a lower cut does not decrease prices nor does it allow the company with the storefront to make a decent profit.
Abuse of market position happens whenever Sony, Nintendo & Xbox make it back to the Nu 1 position. It gross, they can’t help themselves, and they all should be sued every time they do it.
And to wait 5+ years for legal action like this is ludicrous. Justice delayed is justice denied.
On the bright side if Playstation would lose this they can not buy more studios
