PlayStation faces £5 billion legal bill over ‘rip-off’ pricing

Millions of Sony PlayStation customers in the UK could claim a share of up to £5 billion in damages if a new legal claim filed against the gaming giant is successful.

A collective action brought against the company at London’s Competition Appeal Tribunal is accusing it of ‘ripping off’ UK customers.

The claim, filed on Friday and led by consumer rights champion Alex Neill, will hold Sony to account for ‘excessive pricing in relation to digital games and in-game content’ on the PlayStation Store. 

Anyone who has purchased digital games or add-on content on their console or through the PlayStation Store since August 19, 2016 could be eligible for damages – potentially around nine million UK customers. 

However, the date of the trial is to be determined, and it could be years before eligible consumers receive their compensation. 

The claim alleges that Sony abused its market-dominant position to impose unfair terms and conditions on game developers and publishers.

This includes charging a 30 per cent commission on every digital game or in-game purchase made through the online PlayStation Store – which the claim says has driven up prices for consumers.

This has resulted in customers being ‘overcharged’ for digital gaming purchases by up to £5 billion over the last six years, the claim alleges.

30 per cent is the same amount of commission taken by rival Microsoft on sales of Xbox games, as well as by Apple from transactions in its App Store – although Apple is facing a UK legal claim of its own for this reason. 

Google, meanwhile, takes 15 per cent on Android apps in the Google Play Store for the first $1 million of revenue that app developers earn (after this commission goes up to 30 per cent). 

Neill’s case against Sony is ‘opt-out’, meaning people eligible for a refund will be automatically included in the claim, unless they choose to opt-out of the proceedings. 

The estimated damages per individual in the claim is said to be between £67 and £562.

According to Neill, who is being represented by law firm Milberg London LLP, ‘the game is up’ for Sony PlayStation. 

‘With this legal action, I am standing up for the millions of UK people who have been unwittingly overcharged,’ said Neill, who is CEO of consumer complaints website Resolver Group. 

‘We believe Sony has abused its position and ripped off its customers.

‘Gaming is now the biggest entertainment industry in the UK, ahead of TV, video and music, and many vulnerable people rely on gaming for community and connection.

‘The actions of Sony are costing millions of people who can’t afford it, particularly when we’re in the midst of a cost-of-living crisis and the consumer purse is being squeezed like never before.’

MailOnline has contacted Sony PlayStation for comment. 

Represented in the claim will be any UK consumer who purchased digital games or add-on content via the PlayStation Store since August 19, 2016. 

PlayStation Store is Sony’s proprietary electronic storefront within the PlayStation Network, which has been pre-installed on all PlayStations since the launch of the PlayStation 4 in 2013.

PlayStation Store – which lets users purchase digital copies of games to play on their console without the need to own any physical media – has spearheaded a financially beneficial evolution in the gaming industry for Sony.  

The claim’s website, PlayStationYouOweUs.co.uk, explains that the business model of gaming has changed over the years, from games sold as physical discs to games sold digitally.

‘[This] has seen the introduction of in-game content, where players must now also pay to progress, unlock more features, or customise their experience with new characters or weapons,’ the site says.

‘Games are now designed to incentivise players to spend as much money as possible (including children).

’93 per cent of children in the UK play digital games, meaning that the price of digital games is affecting families that may be struggling financially.’ 

Some of the most popular games are free to play but rely on in-game spending as the main source of revenue. 

Commercially, this type of model is now far more profitable than simply selling a physical copy of a game. 

Globally, the video gaming industry generated $54 billion (£45 billion) from in-game purchases like this in 2020. 

PlayStationYouOweUs.co.uk says it will be encouraging Sony to settle the claim as soon as possible so that consumers get their money back ‘in a timely manner’. 

However, if Sony refuses, it could be several years before compensation can be secured for consumers.

The next step is Competition Appeal Tribunal certifying the claim and authorising Alex Neill as the elected class representative, which is expected to happen at a hearing next spring. 

Eligible consumers don’t have to do anything to be represented in the claim, although they can sign up to receive regular updates on how the claim is progressing.

PlayStationYouOweUs.co.uk also has a list of FAQs on its website.