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Gamers lose round with Sony over PlayStation store ‘monopoly’

Nixing a federal class action accusing Sony of exerting monopolistic control over digital game downloads, a judge said Friday that gamers must amend their claims to describe how its conduct was anticompetitive.

SAN FRANCISCO (CN) — A class of gamers failed to persuade a federal judge of their theory that Sony intentionally sacrificed short-term revenue when it stopped allowing other retailers to sell its digital PlayStation games in order to become the sole supplier of digital games through its online store.

“Plaintiffs provide conclusory statements that Sony voluntarily terminated a profitable practice, but do not provide sufficient factual detail,” Chief U.S. District Judge Richard Seeborg wrote in a brief order dismissing the case on Friday.

Until April 2019, gamers could buy download codes for digital PlayStation games from a number of places, including Best Buy, Walmart and Amazon. Then Sony decided to cut out the middleman and establish itself as the only marketplace where video game publishers could sell digital copies of PlayStation games.

A class of gamers claims Sony gave up a profitable, longstanding relationship in order to establish a monopoly over its games in a classic case of refusal to deal.

But Seeborg found their allegations scant on detail, writing, “From the complaint, it is unclear how Sony generated a revenue stream from the sale of download codes by third-party retailers. Although it seems almost certain that Sony gained some revenue through download codes, and plaintiffs need not at this stage prove that the practice was profitable, plaintiffs must at a minimum describe the process through which Sony earned money from the practice. The court cannot assume the practice was profitable when plaintiffs have failed to plead how Sony received any money through the practice.”

Seeborg said Sony suddenly disallowing brick-and-mortar stores to stop selling download codes sounds similar to the situation in Aspen Skiing Co. v. Aspen Highlands Skiing Corp., where a ski resort refused to sell lift passes to a smaller rival who was selling directly to customers. In that case, the U.S. Supreme Court found the ski resort’s conduct to be anticompetitive, but Seeborg said it is difficult to analogize the two cases without knowing how Sony earned money from its download code sales to other stores.

“In short, plaintiffs have failed to plead anticompetitive conduct necessary for their Sherman Act claims,” he wrote in dismissing the case with leave to amend.

Still, the gamers were able to convince him that at minimum, they were subjected to paying higher prices for games purchased through Sony’s Playstation Store than from other retailers, which is enough to show that Sony’s policy had an anticompetitive effect.

“Plaintiffs plead that numerous games are more expensive in digital versions than in physical versions, despite additional costs present for physical versions like the production of the materials and shipping,” Seeborg wrote. “Although as defendant points out there may be other reasons for the increased prices, and physical versions of the game may not be the appropriate benchmark, plaintiffs have at this stage pled increased prices.”

He also found the gamers presented a viable theory that Sony’s conduct restricted the single-brand aftermarket for digital copies of video games, since a PlayStation user looking for a lower price on a digital game would have to buy an entirely different console.

An attorney for Sony did not return a call seeking comment Friday.

Follow @MariaDinzeo
Categories / Business, Courts, Entertainment

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