Compared the apple vs epic case this time the angle seem to be from consumer side with an added argument "consumer would pay less if Sony made less margin" which is technically correct but is absolutely insane from a business angle.
That's basically claiming business shouldn't be able to set their price if their margin is deemed unfair... which is a pretty daring claim. While regulation on pricing could be interesting it's not exactly a judge job and it would be a bit counter current with how the world economy currently work.
As for the whole "closed ecosystem" part this have been debated thousand of time already, nothing new here except I'm not sure it was attempted in UK yet.
Yeah this lawsuit doesn't have a chance but I do think there's an interesting observation in there that these platforms aren't price takers like they ought to be in a more competitive market. I don't think anyone expects there to be perfect competition but the pricing power Sony and others enjoy to just set their margin I think is indicative that something has gone wrong.
This analysis doesn't seem right to me, let me try to think it through. It seems more like "the business is blocking competition from selling at lower prices". The problem in question here is actually the playstation "store".
I'm trying to find a good analogy. Say we're in the early NES days (no online stores, just physical). Nintendo gets a margin on games, because presumably game developers have to pay them for dev kits or some such to make an NES game. The game devs (distributors, publishers, whatever) then sell the game to the stores for some price that gives them a margin. Then the stores add their margin on and sell it to customers. Three margins in there, from there different businesses that have competitors, so they try to keep their margins competitive.
Now let's say Nintendo made a deal with Toys R Us such that NES games could only be sold there, no other stores. Assuming that didn't destroy demand for NES games, Toy's R Us could then ramp up their margins to whatever they want, because there's no other option to consumers. Unfair advantage? Stifling competition?
With Sony, they own the store, and have ensured there's only one. So they get to leverage the same advantage as above. Is it unfair?
Much, much bigger fish have argued this and failed, most notably Epic vs. Apple [1]. (Although there's a separate Epic vs. Google, which I was not clear on [2]; I had those conflated in my mind, which the process of digging up links has now cleared out.)
I won't conclude that the case is hopeless but I can definitely say that the companies will defend this to the hilt, and this does strike me as very weak coming from the consumer, who has the option to not buy and also for the most part buy elsewhere on different platforms. You're not being forced to buy things at higher prices than you want, and games are not anything resembling a human right. Epic's case strikes me as stronger for the developers being hurt by the gouging.
I'm aware of that, which is why you may note my last paragraph did not actually make any arguments based on precedent, instead using the court cases to observe that the companies have a history of hitting this with everything they have.
But they are under common law as the US is, so pointing out that the customer complaint about being damaged strikes me as rather weak and much weaker than the developer's complaints is still valid in their system. I can't complain that Maserati are making way more profits than they should because they're charging high prices on their luxury goods. They could demand 10 times the price and I'm still not being damaged. It's their prerogative. Games are luxury goods too and if Sony wanted to sell them for 10x more, the remedy is to not buy them, and that's generally a much more competitive market where customers have a lot of other options too, e.g., most of the games being "overpriced" on PS5 are also available on at least one other platform, if not 3.
This seems ridiculous. Sony sells consoles at a loss and makes it money on game sales etc. If this succeeds that will kill that business model and who benefits from that?
Commented below, but applies this too, at console launch gamers get a Great piece of kit subsidized by the manufacturer's bet that they can make the money back on games. Equivalent spec pcs cost way more.
For years this model has worked great in physical media sales, I don't have a problem with it in online media.
If we want companies like Sony to produce consoles they need a way to make them profitable. It's an extremely risky investment with no guarantee of success.
Lastly if 30 percent is "unfair" developers would not use the platform. But they do. Same for consumers. If all parties in this didn't derive value they wouldn't trade with each other.
Sure, considering the platform-game paradigm different products sources cross subsidize one another a different stages of their life cycles. This is just how firms work, and is often mostly a matter of accounting.
Nobody benefits if the game consoles get commoditised like PCs. In the long run it would become an unattractive business like PC and people will just buy PCs if the prices become similar for the spec.
> If this succeeds that will kill that business model and who benefits from that?
Everyone. They shouldn't be allowed to price dump computer components so they can charge fat margins by enforcing DRM. They shouldn't even be allowed to own the platform at all. The EU should hit these video game companies with the same laws they're going to hit Google and Apple with. Gotta put an end to their little digital fiefdoms.
Careful what you wish for. If Sony can't profit from license fees for games on its console then there is no incentive to create the console in the first place.
Realistically, most people won't install another store. And if that prediction doesn't come true, then Sony will stop selling hardware at a loss, so the people who benefit would be people who buy a lot of games.
And in any case, console manufacturers aren't "owed" a razor-and-blades business model.
Frankly I think they can allow this without hurting their business. I mean “allowing other stores” was the default before online stores - i.e. vast majority of games used to be sold by retailers that aren’t Sony.
How does Sony/Nintendo/Sega make money back in the day? Royalty fees. Every copy of a game sold on their platform, they get 10-20%. If you refuse then you don’t publish at all - all consoles have lockout mechanisms; NES/SNES has a lockout chip you can only get from Nintendo, modern consoles require all executables to be digitally signed or they won’t run and guess who has the keys, …
Apple would be hurt by allowing alt stores though since they don’t charge royalties. But if forced to open up iOS to alt stores, I think they will start charging royalties like consoles do.
That's not really their business model. Sony has never sold a console that, over the life of the product, has lost money on hardware. Microsoft may have with the XBox and their red ring problem, but that's not really relevant to this discussion.
Who benefits? Consumers mostly. Sony likes that model because it is more profitable for them. It also raises a barrier to competitors. If everybody else sells hardware at a loss, it makes it more difficult to launch a new console.
> The claim alleges customers have therefore paid higher prices for games and add-on content than they would have done.
It's always fun when they try to use us as an excuse for their lawsuit.
The Playstation Store prices are pretty famously cheap. New titles are consistently priced at the typical price points. And they deeply discount stuff all the time. You can get premium games for 75-90% off almost any day of the week (though this feels closer to 50-70% these days).
If this was a lawsuit against Nintendo, their complaints might resonate with me. Nintendo never really puts anything on sale and when they do it's barely a scratch. Indie titles are consistently overpriced on the Nintendo store.
Well..the Sony Ponys sure hope this dies quietly. Sony may lead console share, but thats only good for revenue. Their profit margins are on the storefront.. and their buiness would be nonviable if they where to lose the gouging on that store. Couldent happen to nicer people. Look forward to seeing this progress as sony is slowly assimilated by trillion doller players.
I've never found this to be the case. The big titles are usually $70 USD new, and it's easier to find physical copies of PS4 and PS5 games because Microsoft has been focusing on digital-only as of late.
I've been buying games digitally for about 3 generations and I've found the pricing across all game stores to be the same or cheaper than buying physical on balance. But I don't ever pay full price for a game and I use tracking websites.
FWIW I have the opposite experience, I never buy digital playstation games unless I'm forced to because they all sell for MSRP in New Zealand ($129/$139 NZD), whereas I can always get them physically for $99/$109 brand new. I would much prefer to buy digital games, but I'm not paying an extra $30 for the privilege of saving someone _else_ money
Console generations; Playstation 5 is a generation after Playstation 4, with Playstation 3 before that. There are rough equivalents on the Nintendo and Xbox side, but Playstation numbering makes generation identification easier.
I honestly don't have a strong position on app stores being exclusive or not -- I see pros and cons on both sides.
But I do find it ridiculous that a lot of people (including lawmakers) want to force Apple to open its store, but defend Sony/Xbox.
No. From a legal standpoint, there's no good reason to treat a $499 consumer CPU+GPU device differently, depending on whether it sits in your pocket or under your TV.
If you support government-mandated third-party app stores for your iPhone, you should support them for PS and Xbox as well.
Why though? If I build a big fancy shopping mall should I let business owners use units rent free? I’ve paid construction costs, electricity, taken the risk etc, so it’s obvious I should be able to profit from tenants otherwise I wouldn’t have built the thing in the first place. If you don’t like how I’ve built my mall you can go to the Xbox mall next door, or the PC slums where you are free to do whatever you like.
Readit News
That's basically claiming business shouldn't be able to set their price if their margin is deemed unfair... which is a pretty daring claim. While regulation on pricing could be interesting it's not exactly a judge job and it would be a bit counter current with how the world economy currently work.
As for the whole "closed ecosystem" part this have been debated thousand of time already, nothing new here except I'm not sure it was attempted in UK yet.
I'm trying to find a good analogy. Say we're in the early NES days (no online stores, just physical). Nintendo gets a margin on games, because presumably game developers have to pay them for dev kits or some such to make an NES game. The game devs (distributors, publishers, whatever) then sell the game to the stores for some price that gives them a margin. Then the stores add their margin on and sell it to customers. Three margins in there, from there different businesses that have competitors, so they try to keep their margins competitive.
Now let's say Nintendo made a deal with Toys R Us such that NES games could only be sold there, no other stores. Assuming that didn't destroy demand for NES games, Toy's R Us could then ramp up their margins to whatever they want, because there's no other option to consumers. Unfair advantage? Stifling competition?
With Sony, they own the store, and have ensured there's only one. So they get to leverage the same advantage as above. Is it unfair?
I won't conclude that the case is hopeless but I can definitely say that the companies will defend this to the hilt, and this does strike me as very weak coming from the consumer, who has the option to not buy and also for the most part buy elsewhere on different platforms. You're not being forced to buy things at higher prices than you want, and games are not anything resembling a human right. Epic's case strikes me as stronger for the developers being hurt by the gouging.
[1]: https://www.theverge.com/2021/9/10/22667769/apple-epic-lost-...
[2]: https://www.theverge.com/23944251/epic-google-antitrust-tria...
True, but this is a different jurisdiction. Is there any equivalent case you can point to in the UK?
But they are under common law as the US is, so pointing out that the customer complaint about being damaged strikes me as rather weak and much weaker than the developer's complaints is still valid in their system. I can't complain that Maserati are making way more profits than they should because they're charging high prices on their luxury goods. They could demand 10 times the price and I'm still not being damaged. It's their prerogative. Games are luxury goods too and if Sony wanted to sell them for 10x more, the remedy is to not buy them, and that's generally a much more competitive market where customers have a lot of other options too, e.g., most of the games being "overpriced" on PS5 are also available on at least one other platform, if not 3.
https://www.theverge.com/2021/8/4/22609150/sony-playstation-...
Consoles are often sold at a loss initially but quickly become profitable as hardware costs fall.
The razor-and-blades model isn't as ubiquitous as you might believe.
For years this model has worked great in physical media sales, I don't have a problem with it in online media.
If we want companies like Sony to produce consoles they need a way to make them profitable. It's an extremely risky investment with no guarantee of success.
Lastly if 30 percent is "unfair" developers would not use the platform. But they do. Same for consumers. If all parties in this didn't derive value they wouldn't trade with each other.
Sure, considering the platform-game paradigm different products sources cross subsidize one another a different stages of their life cycles. This is just how firms work, and is often mostly a matter of accounting.
So you are saying that they are engaging in anti-competitive practices. Also at $500, it's unlikely a loss.
Everyone. They shouldn't be allowed to price dump computer components so they can charge fat margins by enforcing DRM. They shouldn't even be allowed to own the platform at all. The EU should hit these video game companies with the same laws they're going to hit Google and Apple with. Gotta put an end to their little digital fiefdoms.
And in any case, console manufacturers aren't "owed" a razor-and-blades business model.
How does Sony/Nintendo/Sega make money back in the day? Royalty fees. Every copy of a game sold on their platform, they get 10-20%. If you refuse then you don’t publish at all - all consoles have lockout mechanisms; NES/SNES has a lockout chip you can only get from Nintendo, modern consoles require all executables to be digitally signed or they won’t run and guess who has the keys, …
Apple would be hurt by allowing alt stores though since they don’t charge royalties. But if forced to open up iOS to alt stores, I think they will start charging royalties like consoles do.
That's not really their business model. Sony has never sold a console that, over the life of the product, has lost money on hardware. Microsoft may have with the XBox and their red ring problem, but that's not really relevant to this discussion.
Who benefits? Consumers mostly. Sony likes that model because it is more profitable for them. It also raises a barrier to competitors. If everybody else sells hardware at a loss, it makes it more difficult to launch a new console.
No business model has a Constitutional right to exist, period.
It's always fun when they try to use us as an excuse for their lawsuit.
The Playstation Store prices are pretty famously cheap. New titles are consistently priced at the typical price points. And they deeply discount stuff all the time. You can get premium games for 75-90% off almost any day of the week (though this feels closer to 50-70% these days).
If this was a lawsuit against Nintendo, their complaints might resonate with me. Nintendo never really puts anything on sale and when they do it's barely a scratch. Indie titles are consistently overpriced on the Nintendo store.
Of people, cars, or - i presume, games: but how are the generations defined? Sorry, not a gamer and never heard such a phrase.
But I do find it ridiculous that a lot of people (including lawmakers) want to force Apple to open its store, but defend Sony/Xbox.
No. From a legal standpoint, there's no good reason to treat a $499 consumer CPU+GPU device differently, depending on whether it sits in your pocket or under your TV.
If you support government-mandated third-party app stores for your iPhone, you should support them for PS and Xbox as well.