Case 3:21-cv-05031 Document 1 Filed 06/29/21 Page 1 of 23
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`Alex R. Straus (SBN 321366)
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`MILBERG COLEMAN BRYSON
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`PHILLIPS GROSSMAN, PLLC
`280 South Beverly Drive, Suite PH
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`Beverly Hills, CA 90212
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`Telephone: (917) 471-1894
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`Facsimile: (310) 496-3176
`astraus@milberg.com
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`Peggy J. Wedgworth (pro hac vice forthcoming)
`Elizabeth McKenna (pro hac vice forthcoming)
`Blake Yagman (pro hac vice forthcoming)
`Michael Acciavatti (pro hac vice forthcoming)*
`MILBERG COLEMAN BRYSON
`PHILLIPS GROSSMAN, PLLC
`100 Garden City Plaza, Suite 500
`Garden City, New York 11530
`Telephone: (212) 868-1229
`Facsimile: (212) 868-1229
`pwedgworth@milberg.com
`emckenna@milberg.com
`byagman@milberg.com
`macciavatti@milberg.com
`
`Attorney for Plaintiff and the Proposed Class
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`*admitted in Pennsylvania only
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`
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`UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF CALIFORNIA
`SAN FRANSISCO DIVISION
`
`
`ALLEN NEUMARK, on behalf of himself
`and all others similarly situated,
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` Plaintiff,
`
`v.
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`SONY INTERACTIVE ENTERTAINMENT
`LLC and SONY GROUP CORPORATION,
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` Defendants.
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` Civil Action No. 3:21-cv-5031
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` CLASS ACTION COMPLAINT
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` DEMAND FOR JURY TRIAL
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` CLASS ACTION COMPLAINT
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`Case 3:21-cv-05031 Document 1 Filed 06/29/21 Page 2 of 23
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`Plaintiff Allen Neumark (“Plaintiff”), on behalf of himself and all others similarly situated,
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`brings this Class Action Complaint against Sony Interactive Entertainment LLC and Sony Group
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`Corporation (collectively, “Sony” or “Defendants”) for violation of federal and state antitrust and
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`unfair competition laws. Based upon personal knowledge, information and belief, and the
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`investigation of counsel, Plaintiff alleges as follows:
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`I. INTRODUCTION
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`1.
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`This is an antitrust and unfair competition class action seeking damages and
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`injunctive relief for violation of Section 2 of the Sherman Antitrust Act, 15 U.S.C. § 2, and the
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`California Business and Professions Code § 17200, against Sony. Plaintiff brings this action on
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`behalf of himself and all other similarly situated Class members who purchased digital video games
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`on Sony’s PlayStation Store (the “Class”) between November 12, 2020 and the present.
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`2.
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`Sony manufactures the PlayStation, a line of video game consoles that launched in
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`1994 and has become one of the most popular video game systems in the world. Sony’s most recent
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`model, the PlayStation 5, is expected to become the best-selling video game console of all time.
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`PlayStation 5 launched on November 12, 2020, and by March 31, 2021, Sony had sold 7.8 million
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`units.1 To date, Sony has sold 9.1 million units.2 Despite record sales numbers, Sony has been
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`unable to supply anywhere close to enough units to meet consumer demand.3 Sales are predicted to
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`surpass 200 million units within the next five years.4
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`1 Sam Byford, Sony has sold 7.8 million PS5 consoles, The Verge (Apr. 28, 2021),
`https://www.theverge.com/2021/4/28/22407195/sony-ps5-sales-numbers-q4-2020-earnings.
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`2 Tom Chapman, Sony has Sold Over 9 Million PS 5 Consoles Since Launch, GGRecon (June 22,
`2021) https://www.ggrecon.com/articles/ps5-9-million/
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`3 N.F. Mendoza, PlayStation rakes in $2.6 billion in PS5 sales, TechRepublic (Feb. 25, 2021),
`https://www.techrepublic.com/article/playstation-rakes-in-2-6-billion-in-ps5-sales/.
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`4 Aernout van de Velde, PS5 Sales to Exceed 200 to 300 Million Units in 5 to 6 Years, Analyst
`Says; Could Terminate the Long-Running Console War, WCCF Tech (Oct. 17, 2020),
`https://wccftech.com/ps5-sales-200-300-million-700-console-war/; Lionel Sujay Vailshery,
`Forecast unit sales of the PlayStation 5 worldwide from 2020 to 2024, Statistica (Apr 12, 2021),
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`Case 3:21-cv-05031 Document 1 Filed 06/29/21 Page 3 of 23
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`3.
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`Sony has used the console’s popularity to build PlayStation into a multinational and
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`multifaceted digital entertainment brand5 which includes an online store for purchasing and
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`downloading digital video games directly to the console (the PlayStation Store),6 a unified online
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`multiplayer gaming and digital media delivery service (the PlayStation Network),7 a subscription-
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`based digital video game streaming service (PlayStation Now),8 a digital movie and TV distribution
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`service (PlayStation Video),9 and Sony’s video game development arm (PlayStation Studios).10
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`4.
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`The bulk of the profits Sony derives from the PlayStation franchise do not come
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`from sales of its consoles, but from the digital video games and other digital content sold through
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`the PlayStation Store and the PlayStation Network, which produced over $17 billion in revenues
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`10
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`for Sony in the fiscal year ending March 31, 2021.11
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`5.
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`The PlayStation Store launched in 2006 alongside the PlayStation 3 console,
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`allowing users to purchase digital copies of PlayStation games and download them directly to the
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`console as an alternative to buying physical disks and inserting them into the console’s disk drive.
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`Since the launch of the original PlayStation in 1994, the games had been available only on disks.
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`Now users can access the PlayStation Store from their console, purchase games, and download
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`https://www.statista.com/statistics/1124784/unit-sales-ps5-worldwide/.
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`5 About Us: We are PlayStation, Sony Interactive Entm’t, https://www.playstation.com/en-
`us/corporate/about-us/ (last visited June 22, 2021).
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`6 About PlayStation Store, Sony Interactive Entm’t, https://www.playstation.com/en-us/about-
`playstation-store/ (last visited June 22, 2021).
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`7 PlayStation Network, Sony Interactive Entm’t, https://www.playstation.com/en-us/playstation-
`network/ (last visited June 22, 2021).
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`8 PlayStation Now, Sony Interactive Entm’t, https://www.playstation.com/en-us/ps-now/ (last
`visited June 22, 2021).
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`9 PlayStation Video, Sony Interactive Entm’t, https://www.playstation.com/en-us/playstation-
`video/ (last visited June 22, 2021).
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`10 SIE PlayStation Studios, Sony Interactive Entm’t, https://www.playstation.com/en-
`us/corporate/playstation-studios/ (last visited June 22, 2021).
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`11 Sony Corporation, Financial Statements and Consolidated Financial Results for the Fiscal
`Year Ended March 31, 2021 (Apr, 28, 2021), https://www.sony.com/en/SonyInfo
`/IR/library/presen/er/pdf/20q4_sony.pdf. Dollar figure based on the following exchange rate
`from April 28, 2021: 1 JPY = 0.0092 USD.
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`them directly to their console through the PlayStation Network. In 2020, digital downloads made
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`up 62% of sales for PlayStation games, compared to only 43% in 2018.12
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`6.
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`Until recently, consumers could also purchase download codes for digital
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`PlayStation games from the same online and brick-and-mortar retailers who also sell physical
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`games such as Amazon, GameStop, Best Buy, and Wal-Mart. The codes could be redeemed on the
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`PlayStation Store for digital copies of PlayStation games.
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`7.
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`On April 1, 2019, Sony eliminated retailers’ ability to sell download codes for
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`digital PlayStation games. Because delivering digital content to PlayStation consoles requires
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`access to Sony’s PlayStation Network, the new policy established the PlayStation Store as the only
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`source from which consumers can purchase digital PlayStation games, and the only source to which
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`video game publishers can sell digital PlayStation games. Sony also requires publishers who sell
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`digital games on the PlayStation Store to relinquish full control over the retail price. As a result, the
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`policy swiftly and effectively foreclosed any and all price competition in the retail market for digital
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`PlayStation games.
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`8.
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`Sony’s new restrictions established a monopoly over the sale of digital PlayStation
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`games. Sony’s monopoly allows it to charge supracompetitive prices for digital PlayStation games,
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`which are significantly higher than their physical counterparts sold in a competitive retail market,
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`and significantly higher than they would be in a competitive retail market for digital games.
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`9.
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`A comparison of prices for the most popular digital games on the PlayStation Store
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`with prices for the same games available on disk from an array of retailers suggests prices on the
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`PlayStation store are, on average, about 76% higher than those for games on disk, and in some cases
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`22
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`closer to 100% higher.13 There is no legitimate reason digital games should be more expensive than
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`their physical counterparts. In fact, given the costs saved on packaging and distribution, prices for
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`digital games in a truly competitive market would likely be lower than they are for games on disk.
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`12 Mustafa Mahmoud, 62% of all full PlayStation game sales were digital in 2020, Kitguru (Mar.
`12, 2021), https://www.kitguru.net/gaming/mustafa-mahmoud/62-of-all-full-playstation-game-
`sales-were-digital-in-2020/.
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` CLASS ACTION COMPLAINT
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`13 See ¶¶ 57-59 and Table 1, infra.
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`Case 3:21-cv-05031 Document 1 Filed 06/29/21 Page 5 of 23
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`10.
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`Sony’s ability to maintain supracompetitive prices on the PlayStation Store while
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`consumers continue to switch from disks to digital game in ever increasing numbers, along with
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`Sony’s skyrocketing revenues from digital games, demonstrate that prices for digital games on the
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`PlayStation store are not responsive to changes in prices for PlayStation games on disk.
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`11.
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`The relevant product market in this case is the market for downloadable, digitally-
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`delivered video game content that is compatible with a PlayStation console (“digital PlayStation
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`games”).
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`12.
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`As a direct and proximate result of Sony’s unlawful acquisition and maintenance
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`of a monopoly over the sale of digital PlayStation games, Plaintiff and Class members have paid
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`and will continue to pay significantly more for digital games than they would have absent Sony’s
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`monopoly. Plaintiff seeks damages for himself and Class members equal to the amount they have
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`already overpaid, treble damages, and injunctive relief to end to the overcharges they will continue
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`to pay as long as Sony is allowed to keep its unlawful monopoly.
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`II.
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`THE PARTIES
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`13.
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`Plaintiff Allen Neumark is an individual residing in Miami, Florida. Plaintiff owns
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`a PlayStation 5 Digital Edition console, has purchased digital video games on the PlayStation Store
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`and downloaded them to his console during the Class period, and plans to purchase and download
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`more digital games from the PlayStation Store in the future.
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`14.
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`Defendant Sony Interactive Entertainment LLC is a corporation organized and
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`existing under the laws of California, with its headquarters and principal place of business at 2207
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`Bridgepointe Parkway, San Mateo, California. It is a wholly-owned subsidiary of the Japanese
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`consumer electronics and media conglomerate Sony Corporation, and is the sole owner the
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`PlayStation digital entertainment brand.
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`15.
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`Defendant Sony Group Corporation is a corporation organized and existing under
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`the laws of Japan with its principal place of business at 7-1, Konan 1-Chome, Minato-Ku, Tokyo
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`108-0075, Japan. Sony Group Corporation is the parent corporation of Sony Interactive
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` CLASS ACTION COMPLAINT
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`Entertainment LLC.
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`III. JURISDICTION AND VENUE
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`16.
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`This action arises, in part, under section 2 of the Sherman Act, 15 U.S.C. § 2. The
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`Court has federal question jurisdiction pursuant to the Clayton Antitrust Act, 15 U.S.C. § 15, and
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`pursuant to 28 U.S.C. §§ 1331 and 1337.
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`17.
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`The Court also has jurisdiction over this action pursuant to 28 U.S.C. § 1332(d)
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`because this is a class action in which the aggregate amount in controversy exceeds $5,000,000 and
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`at least one member of the putative class is a citizen of a different state than the Defendants.
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`18.
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`The Court has personal jurisdiction over Sony because Sony is headquartered in
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`California. The Court also has jurisdiction pursuant to Cal. Code Civ. P. § 410.10, as a result of
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`Sony’s substantial, continuous and systematic contacts with the State, and because Sony has
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`purposely availed itself of the benefits and privileges of conducting business activities within the
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`19.
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`Venue is proper in this District pursuant to 28 U.S.C. § 1391 because Class
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`members purchased digital video games from Sony in this District, Sony has its principal place of
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`business in this District, a substantial part of the events or omissions giving rise to Plaintiff’s claims
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`occurred here, and Sony is a corporation subject to personal jurisdiction in this District and,
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`therefore, resides here for venue purposes.
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`IV.
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`INTRADISTRICT ASSIGNMENT
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`20.
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`Pursuant to N.D. Cal. Civ. L.R. 3-2(c), (d) and 3-5(b), this action is properly
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`assigned to the San Francisco division because a substantial part of the events and omissions which
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`give rise to the claim emanated from California, and from San Mateo County in particular.
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`V.
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`FACTUAL ALLEGATIONS
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`A.
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`Industry Background
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`21.
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`The video game market has grown substantially in recent years. Revenues in the
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`video game industry reached $180 billion worldwide in 2020, exceeding those from movies and
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`from the major North American sports leagues combined.14
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`14 Jordan Williams, Video game industry bigger than sports, movies combined: report, The Hill
`(Dec. 23, 2020), https://thehill.com/blogs/in-the-know/in-the-know/531479-video-game-
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`22.
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`Video games are played on one of several different electronic platforms, including:
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`(i) smartphones and tablets; (ii) personal computers; (iii) video game consoles; and (iv) specialized
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`handheld devices. This case concerns video games consoles, specifically the market for
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`downloadable, digitally-delivered video game content that is compatible with a PlayStation console
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`(“digital PlayStation games”).
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`23.
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`For the past two decades, three companies have dominated the market for video
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`game consoles: Sony, which manufactures the PlayStation console; Microsoft, manufacturer of the
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`Xbox; and Nintendo. All three companies periodically release new models of their consoles, with
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`updated hardware and software and new design features.
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`24.
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`The original PlayStation launched in 1994, and Sony recently released the fifth
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`iteration of that console.15 Microsoft has released eight versions of its Xbox since 2001, when it
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`entered the market.16 Nintendo has the longest history of the three, having released seven console
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`13
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`models since its 1985 debut.17
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`25.
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`Games are not cross-compatible on different consoles, so once a consumer
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`purchases a console, he or she must purchase games that are designed for that particular console.
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`The consoles are substantially differentiated, with distinctively designed controllers and other
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`factors that lead to a different experience for the player, even where the same games are available
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`on more than one console. Consumers, therefore, tend to prefer one console over the others, and
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`are far more likely to continue buying the new models of one console than to switch to a different
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`console entirely.
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`26.
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`The supply chain for video games has historically been characterized by three
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`players: (i) developers, who design and execute the creation of games and produce the software;
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`industry-bigger-than-sports-movies-combined-report
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`15 Jimmy Thang, The Evolution of PlayStation Consoles, GameSpot (Sept. 7, 2020),
`https://www.gamespot.com/gallery/the-evolution-of-playstation-consoles/2900-899/.
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`16 Gabe Gurwin, The history of the Xbox, Digital Trends (Mar. 16, 2021),
`https://www.digitaltrends.com/gaming/the-history-of-the-xbox/.
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`17 Jeff Dunn and Kevin Webb, A visual history of Nintendo’s video game consoles, Bus. Insider
`(May 16, 2019), https://www.businessinsider.com/nintendo-consoles-in-history-photos-switch-
`2017-1
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`(ii) publishers, who handle funding, marketing, and distribution to retailers; and (iii) retailers, who
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`sell games to the console-owning public.18
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`27.
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`The relationship between developers and publishers is akin to that between book
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`authors and publishing houses. The author produces a manuscript and then relies on a publishing
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`house to print and market the books, and deliver them to bookstores. Similar to the way that
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`publishing houses often offer advances to authors who agree to write manuscripts for them, video
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`game publishers also provide funding to developers.
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`28.
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`The three major video game console manufacturers also develop and publish games
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`for their consoles in-house, called “first-party games” which are often available exclusively on that
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`company’s console. Nintendo relies heavily on first-party games, which make up about 85% of
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`game sales for its Switch console.19 Most PlayStation games, on the other hand, are developed and
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`published by third parties, with about 17% of game sales being first-party in 2020.20
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`B.
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`The Rise of Digital Video Games
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`29.
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`Historically, video games were sold exclusively on disks that users inserted into the
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`console. Games could be purchased or rented from a variety of online and brick-and-mortar
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`retailers, including many that bought and sold used copies. The disks could also be traded and
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`shared amongst friends.
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`30. More recent versions of all three consoles also allow users to purchase and
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`download digital copies of games directly to the console, which connects to the internet, thereby
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`avoiding the need for any physical disk. Sony, Microsoft, and Nintendo each operate their own
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`virtual store where consumers can buy and download digital games directly on their console.
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`18 Intro to the Industry: The difference between game developers and publishers, Gaming Street
`(Sept. 18, 2019), https://gamingstreet.com/intro-to-the-industry-the-difference-between-game-
`developers-and-publishers/.
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`19 Ben Gilbert, Nintendo’s recent success highlights a critical risk to the gaming giant’s
`business, Bus. Insider (Feb. 4, 2019), https://www.businessinsider.com/nintendo-reliance-on-
`first-party-games-huge-risk-to-business-2019-2.
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`20 Sony Corporation, Supplemental Information for the Consolidated Financial Results for the
`Fourth Quarter Ended March 31, 2021 at 9 (Apr. 28, 2021),
`https://www.sony.com/en/SonyInfo/IR/library/presen/er/pdf/20q4_supplement.pdf
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`31.
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`Sales of digital games for the three consoles exceeded sales of their physical
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`counterparts for the first time in 2020, and the trend is likely to continue, with video game disks
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`following the path taken by DVDs and CDs towards the history books.21
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`32.
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`All three digital stores operate in a similar fashion: game publishers provide the
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`game software to the digital store, which then makes the games available for purchase. The store
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`collects payment, and facilitates digital delivery to users’ console. For their services maintaining
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`the platform and the necessary infrastructure for delivering digital content, Sony, Microsoft, and
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`Nintendo take a cut of every sale on their respective stores, remitting the balance to the publishers.
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`33.
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`Sony’s PlayStation Store differs from both Microsoft and Nintendo’s digital stores,
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`however, in that game developers must cede total control over the retail price to Sony.22 Microsoft
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`and Nintendo, on the other hand, allow developers who sell games through their platforms to set
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`12
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`the retail price, and then take 30% of that price on each sale for platform fees.23 Sony follows a
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`13
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`similar revenue sharing model with some publishers, and is reported to take the same 30% cut.24
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`With other publishers, however, Sony maintains agreements whereby it pays the publisher an
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`agreed upon “wholesale price” for each game sold, with the full retail markup going to Sony.25
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`21 Dylan Warman, For the First Time, Digital Game Sales Outnumber Physical Sales,
`ScreenRant (Aug. 12, 2020), https://screenrant.com/digital-game-sales-consoles-outnumber-
`physical-first-time/
`
`22 See PlayStation Global Developer & Publisher Agreement ¶ 15.2.2 (effective Apr.1, 2018)
`(“Each SIE Company has 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 [PlayStation
`Network].”), https://www.sec.gov/Archives/edgar/data/712515/000071251518000045/ex-
`101playstationglobaldev.htm#:~:text=This%20PlayStation%20Global%20Developer%20and%2
`0Publisher%20Agreement%20%28,company%20with%20offices%20at%202207%20Bridgepoi
`nte%20Parkway%20 (last visited June 25, 2021).
`
`23 See Frequently Asked Questions, Nintendo Developer Portal, https://developer.nintendo
`.com/faq (last visited June 22, 2021); Microsoft Store App Developer Agreement, Version 8.6
`(effective July 10, 2020), https://query.prod.cms.rt.microsoft.com/cms/api/am/binary/RE4o4bH
`
`24 Tom Marks, Report: Steam's 30% Cut Is Actually the Industry Standard, IGN (Jan. 13, 2020),
`https://www.ign.com/articles/2019/10/07/report-steams-30-cut-is-actually-the-industry-standard
`
`25 PlayStation Global Developer & Publisher Agreement ¶ 15.2.1; see supra n.22.
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`C.
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`Competition in the Retail Market for Digital Video Games
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`34.
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`In the retail market for digital video games, price competition occurs principally in
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`one of two ways. First, where publishers maintain some control over the retail price, they compete
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`with one another to gain market share by offering a lower price to consumers. Second, where
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`download codes are available from outside retailers, the retailers compete amongst themselves and
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`with the in-console stores to offer the best price.
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`35.
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`For Xbox and Nintendo games, consumers can buy these download codes from the
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`same retailers who sell games on disks, which they then use to download the games directly to their
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`consoles.
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`36.
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`PlayStation games were previously sold in the same manner, but as of April 1, 2019,
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`Sony stopped allowing retailers to sell download codes for PlayStation games. As a direct and
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`proximate result, the only place consumers can purchase digital copies of PlayStation games is
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`directly from the PlayStation Store, where Sony has complete control over retail prices.
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`D.
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`The PlayStation 5 Launch
`
`37.
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`On November 12, 2020, Sony launched the PlayStation 5. As of March 31, 2021,
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`Sony had sold over 7.8 million units, making the PlayStation 5 the fastest-selling console of all
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`time,26 but Sony has nevertheless been unable to meet demand for the console. Upon release,
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`PlayStation 5 consoles were almost immediately sold out at every retailer. Today, it is still very
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`difficult for consumers to get their hands on a PlayStation 5 gaming console, with inventory
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`restocks at major retailers and on Sony’s website selling out almost instantaneously. PlayStation 5
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`sales are expected to eventually surpass 200 million units.27
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`38.
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`The PlayStation 5 is available in two versions: the Base Model which is available
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`for $499 retail, and the Digital Edition which is $100 less expensive at $399 retail.
`
`
`26 Andy Robinson, Sony reports 7.8m PS5s shipped in ‘PlayStation’s best year ever’, Video
`Games Chronicle (Apr. 28, 2021), https://www.videogameschronicle.com/news/sony-reports-7-
`8m-ps5-sales-in-playstations-best-year-ever/.
`
`27 Aernout van de Velde, PS5 Sales to Exceed 200 to 300 Million Units in 5 to 6 Years, Analyst
`Says; Could Terminate the Long-Running Console War, WCCF Tech (Oct. 17, 2020),
`https://wccftech.com/ps5-sales-200-300-million-700-console-war/.
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`39.
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`The Base Model includes the previously-standard optical disk drive, allowing users
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`to choose whether to purchase physical disk copies of games, available from retailers such as those
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`mentioned above, or to buy digital copies and download directly to their console. The less expensive
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`Digital Edition does not include a disk drive, so users can only purchase games in digital format at
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`Sony’s monopoly prices.
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`E.
`
`Sony Eliminates Retail Competition for Digital PlayStation Games
`
`40.
`
`Until recently, consumers could purchase download codes for digital PlayStation
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`games from the same array of retailers that sell physical games. This allowed PlayStation users to
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`purchase a digital copy of a video game from their preferred retailer at the retailer’s chosen price.
`
`41.
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`However, starting on April 1, 2019, Sony implemented a new policy preventing
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`retailers from selling digital download codes. Since access to Sony’s PlayStation Network is
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`required to enable digital delivery of PlayStation games, the result of this scheme is that consumers
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`can purchase digital games only through the PlayStation Store or not at all. For owners of the
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`PlayStation 5 Digital Edition, that means the only place they are able to purchase any video games
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`for their console is through the PlayStation Store.
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`42.
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`Sony, at all relevant times, retained exclusive control over the design, features and
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`operating software for PlayStation consoles, and over the necessary software for delivering digital
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`content to PlayStation consoles.
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`43.
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`Sony specifically intended to and did eliminate price competition from other digital
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`video game retailers. As a result, Sony has an unlawful monopoly over the market for digital
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`PlayStation games, from which it derives supracompetitive profits.
`
`44.
`
`Before the April 2019 policy changes, publishers could sell both physical
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`PlayStation games and digital games, via download codes, through a variety of retailers. Retailers
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`profit from markups on the final purchase price, but price competition among them puts downward
`
`pressure on retail price markups. Sony also charges a Platform Royalty Fee on each game sold by
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`retailers for use on its gaming consoles, including PlayStation 5. On information and belief, Sony’s
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`Platform Royalty Fee for physical games sold at external retailers is 11.5%.
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`Case 3:21-cv-05031 Document 1 Filed 06/29/21 Page 12 of 23
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`45.
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`By foreclosing retail competition for digital PlayStation games, Sony effectively
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`takes the retail markup for itself in addition to its royalty fee. It also charges a higher total fee than
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`the sum of both the retail markup and the Platform Royalty Fee for games sold by retailers.
`
`Consumers, limited to a single source for purchasing any digital PlayStation content, are forced to
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`pay a higher price for digital PlayStation games than they would in a free and unrestrained
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`competitive retail market.
`
`46.
`
`Additionally, by taking complete control over retail prices for digital PlayStation
`
`games, Sony foreclosed price competition among video game publishers to a significant degree,
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`because they can no longer execute a strategy of offering lower retail prices to gain a higher share
`
`of sales. Instead, Sony sets the price to maximize its own profits, and Sony’s interests in choosing
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`a retail price strategy conflict with the interests of video game publishers. Because Sony is
`
`responsible for all the marginal costs associated with each sale, it is incentivized to set the price
`
`higher to obtain a greater margin on each sale. Publishers, who incur no additional costs with each
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`additional game sold, would maximize their profits at a lower price point but greater sales volume,
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`relative to Sony.
`
`47.
`
`Sony owns, possesses or controls 100% of the PlayStation Store, maintains and
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`operates the PlayStation Store with Sony employees or agents, and controls all of the sales, revenue
`
`collections and other business operations.
`
`48.
`
`The revenue Sony generates through sales of digital video games has been
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`increasing sharply since it established its monopoly on digital PlayStation games. In 2019, Sony
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`made $12.48 billion through sales of digital PlayStation games and associated content.28 For the
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`22
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`fiscal year ending March 31, 2021, that number was $17.32 billion.29 With the surge in popularity
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`of the digital-only console version of the PlayStation 5, this number could be even higher in 2021.
`
`
`28 Ravi Sinha, PlayStation Network Generated 2nd Highest Revenue Ever in 2019, GamingBolt
`(Feb. 4, 2020), https://gamingbolt.com/playstation-network-generated-2nd-highest-revenue-ever-
`in-2019
`
`29 Sony Corporation, Financial Statements and Consolidated Financial Results for the Fiscal
`Year Ended March 31, 2021 (Apr. 28, 2021),
`https://www.sony.com/en/SonyInfo/IR/library/presen/er/pdf/20q4_sony.pdf. Dollar figure based
`on the following exchange rate from April 28, 2021: 1 JPY = 0.0092 USD.
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`VI. MONOPOLY POWER IN THE RELEVANT MARKET
`
`49.
`
`The relevant product market in this case is the market for downloadable, digitally-
`
`delivered video game content that is compatible with a PlayStation console (“digital PlayStation
`
`games”). The relevant geographic market is the United States, its territories, possessions, and the
`
`Commonwealth of Puerto Rico.
`
`50.
`
`As discussed above, the market for video game consoles is dominated by three
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`companies of rou