Source Code: Your daily look at what matters in tech.

source-codesource codeauthorNick StattNoneWant your finger on the pulse of everything that's happening in tech? Sign up to get David Pierce's daily newsletter.64fd3cbe9f

Get access to Protocol

Will be used in accordance with our Privacy Policy

I’m already a subscriber

PlayStation owners sue Sony for alleged monopoly on digital game purchases

Restricting access to alternative digital game purchases has caused a spike in prices, the complaint alleges.

PlayStation 5

Sony's console platform restricts purchases to the PlayStation Store, resulting in a lawsuit filed Thursday.

Image: Sony

PlayStation owners have sued Sony over what they allege is unlawful and monopolistic behavior with regard to restrictions on digital game purchases. The lawsuit, filed in California early Thursday morning and first reported by Bloomberg, is seeking class-action status and addresses issues with digital software distribution that sit at the heart of the ongoing Epic Games v. Apple antitrust trial.

In this case, the plaintiffs accuse Sony of artificially inflating prices of PlayStation games through its digital storefront, the PlayStation Store, and restricting both game makers and consumers from purchasing games elsewhere. The complaint cites Sony's decision in 2019 to no longer allow retailers to sell PlayStation Store download codes, claiming the result of that decision and Sony's longstanding restrictions barring competing purchase options on its consoles has been a markup of about 175% on digital PlayStation games relative to physical discs.

"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," the complaint reads.

The lawsuit is a rare strike against what is considered an industry standard practice in the console gaming market. Yet renewed antitrust scrutiny of tech platforms and Epic's lawsuit targeting Apple and the App Store have raised critical, unanswered questions about what may be legally permissible in the market for software distribution.

At the heart of Epic v. Apple is a debate over whether smartphones, like the iPhone, should be treated differently than game consoles. Apple has argued they should not and that it competes with console manufacturers for consumer dollars on a level playing field, justifying a 70-30 revenue share and restrictions on the App Store that ban competing payment processing options and alternative storefronts (as is also the case on game consoles). Epic has argued the 70-30 revenue share and restrictions on console ecosystems is justified and irrelevant to the iPhone, a device that generates most of Apple's profits, because game console makers are selling special purpose devices at a loss and earn profit on software. Sony has twice in the last year invested heavily in Epic Games, and the two now have a strategic partnership on a number of their respective business units.

Yesterday, Xbox VP Lori Wright testified that the Xbox business model is to sell hardware at a loss, confirming that Microsoft has never earned a profit from an Xbox device sale. "The console gaming business is traditionally a hardware subsidy model," Microsoft said in a statement in response to Wright's testimony. "Game companies sell consoles at a loss to attract new customers. Profits are generated in game sales and online service subscriptions."

Latest Stories