Sony Faces $7.85 Million Settlement Over PlayStation Store Digital Game Sales

A lawsuit claims Sony’s PlayStation Store policies reduced competition and forced consumers to pay more for digital games.

Sony may pay $7.85 million to resolve a class action complaint that the company violated antitrust laws by restricting the sale of digital games on the PlayStation. The lawsuit claimed that Sony removed third-party merchants, forcing consumers to pay a premium price for some digital games.

The controversy centers on Sony’s decision to stop allowing merchants like Amazon, Walmart, and Best Buy to sell digital game vouchers for PlayStation games. Before the policy change, consumers could buy digital game codes from third-party sellers, sometimes at a lower price or a discount. Users who lose the coupons are forced to purchase digital games directly from the PlayStation Store.

The lawsuit says this rule stifled competition that would have helped to drive down prices. Third-party retailers could sell digital games at a discount or at a lower rate to clear inventory, providing consumers with an alternative to purchasing games from Sony. Sony, however, denies any wrongdoing and disputed allegations that consumers lost money because of the program.

The court has not yet ruled on whether Sony broke antitrust rules. Instead, it tentatively approved a $7.85 million settlement, pending a full hearing on the deal on Oct. 15. The hearing will decide if the settlement is approved, how the money will be distributed, and how the legal bills will be paid.

The $7.85 million payment might seem small compared to Sony’s total business.

$7.85 million sounds like a lot of money, but it's pocket change for a company the size of Sony. If the proposed settlement is approved, Sony will be allowed to settle the claim without admitting any guilt. Proceeds also would be paid to qualifying class members. Consumers who purchased eligible PlayStation digital games during the relevant time period may be entitled to a share of the settlement.

Individual compensation may be minimal depending on the number of qualified claimants. The case underscores the growing importance of digital ownership and the more consolidated PlayStation environment at Sony. As physical and digital game sales keep growing, Sony’s control over where consumers may purchase digital games has become increasingly important.

Third-party retailers can no longer provide digital vouchers; therefore, users can no longer shop around for cheaper digital editions of PlayStation games as they could before. PlayStation Store currency cards are still available at stores, but they require buyers to add funds to their PlayStation accounts before purchasing a game via Sony's storefront.

If you’re trying to buy a $70 game, you might have to pay PlayStation Store cash before you can buy the game. That was not the case before, when a store might discount a certain digital game code. Now, Sony is the single vendor of the digital game and sets the price.

PlayStation players also have additional outlets for buying games, such as third-party digital storefronts.

That’s because the issue isn’t just about the price of individual games—it's also about the competitive nature of PlayStation’s digital marketplace. The plaintiffs said that removing third-party tickets for digital games would reduce competition and potentially force customers to pay more than they otherwise would.

The suggested settlement could be a small price to pay relative to the magnitude of Sony’s gaming business. More broadly, the case could lead to continuing judicial and regulatory scrutiny of digital storefronts and the power of major platform owners over digital sales. Sony’s digital ecosystem is still under scrutiny for customer ownership and competitiveness.

The $7.85 million settlement doesn’t compel Sony to alter its PlayStation Store policy or prove that the company broke antitrust laws. Authorization would go a long way toward resolving the financial concerns raised in the class action. A final approval hearing Oct. 15 will be a key next step. Until then the transaction is still up in the air, and Sony is still fighting the charges against it.

It's a good example of how much buying digital games has changed for PlayStation players since third-party retailers started selling individual PlayStation game tickets. While the proposed settlement has a modest financial impact on Sony—at least for now—the larger conversation about digital competition and ownership will no doubt go on.