Sony faces lawsuit over alleged “monopoly pricing” of PlayStation downloads - Ars Technica

The lawsuit, filed in Northern California federal court (first reported on by Bloomberg News and obtained by Polygon), alleges that Sony's monopoly control over the PlayStation Store leads to "supracompetitive prices for digital PlayStation games, which are...

The suit also says that Sony's pricing controls are particularly pernicious because "consumers continue to switch from disks [sic] to digital games in ever-increasing numbers," with digital sales making up 62 percent of PlayStation sales in 2020.

The second difference between PlayStation consoles and others, the suit argues, is that PlayStation game publishers "must cede total control over the retail price to Sony.".

The suit cites a PlayStation Global Developer and Publisher Agreement filed with the SEC that states local Sony Interactive Entertainment affiliates have "the sole and exclusive right to set the retail price to Users for Digitally Delivered Products sold or otherwise made available for purchase on or through PSN in its territory" and to "modify any Digitally Delivered Product’s retail price at any time without notice to Publisher." This is in contrast to Microsoft and Nintendo, which "allow developers who sell games through their platforms to set the retail price.".

Nonetheless, the suit alleges that "Sony foreclosed price competition among video game publishers to a significant degree, because they can no longer execute a strategy of offering lower retail prices to gain a higher share of sales.".

Sony has an incentive to keep digital game prices high, the suit argues, because the company incurs the marginal costs of each game download (such as bandwidth fees).

By contrast, the suit argues, if publishers controlled digital PlayStation game pricing directly, they "would maximize their profits at a lower price point but greater sales volume, relative to Sony." The end result, the suit alleges, is "reduced output and supply of PlayStation video games" because "lower prices would generate both increased demand and increased supply to meet that demand."