Sony's Terms-Of-Service Change Indicates a Serious Problem and May Cause Material Harm

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PlayStation 3Last week, resourceful users of Sony's PlayStation Network examined the updated Terms of Service for the PlayStation Network and noted that the new agreement forbids users (unless those users notify Sony, in writing, within 30 days of accepting the agreement) from participating in a class-action lawsuit against Sony. On the most obvious level, this is just Sony's legal department trying to protect the company from liability in case something happens such as when the PlayStation Network went down for nearly one month. Some commentators are up-in-arms arguing that the new terms-of-service are anti-consumerist. That's a moral argument. Here at FI, we want to make a practical argument. Business models have changed substantially since the PlayStation 3 console was launched, and constant changes to the PlayStation Network terms-of-service are doing material harm to owners of the console. Read on for a more detailed explanation...
Sony is treating the PlayStation Network like an online service. Which it is... kinda. Let's consider another of Sony's online properties. If you were a subscriber to Sony Online Entertainment's EverQuest II, you paid a subscription and got access to the game. At any time, if SOE decided to change the terms of the agreement, you could walk away. Sony could raise the subscription price, change the terms-of-service or nerf your favorite ability. If they did so, you could cancel your subscription and walk away. You may have sunk a lot of time into your character, but you could decide you no longer liked the terms on which you had to play the game. When EverQuest II launched its free-to-play version (a massive change), a dissatisfied player could change versions or quit.


When the PlayStation 3 console launched, I don't think Sony fully understood how integral connectivity was for this generation of consoles. As such, the PlayStation 3 console (and to a lesser extent, the PSP) and the PlayStation Network were envisioned as different services. Anyone who purchased the console could still purchase and play Uncharted: Drake's Fortune or Ratchet & Clank Future: Tools of Destruction and enjoy the intended game experience. In the five years since the PlayStation 3 was launched (and even more since the console design process began in earnest), Sony and other companies have increasingly depended on online connectivity for the delivery of content and digital rights management. Now, how much of your PlayStation 3 console can you enjoy without the PlayStation Network?

There's the problem. Sony has already faced this problem repeatedly. When the PlayStation 3 launched, it was possible to install and run alternative operating systems on the hardware. Sony removed that function with a firmware update. As a result, class-action lawsuits were filed to restore that functionality. Sony had taken something away that PlayStation 3 owners had already paid for. That's not acceptable.

This is the problem that Sony, gamers and the legal system of many countries face. If the PlayStation Network is required to enjoy the PlayStation 3, then any change to that service is, potentially, doing material harm to owners of the PlayStation 3, a piece of hardware some owners paid as much as $600 for, not including software and additional hardware (such as controllers or the PlayStation Move accessory).

That's why forbidding class-action lawsuits is so problematic. The ability to install other operating systems on the PlayStation 3 wouldn't have been restored without the ability to resort to a class-action lawsuit. Such lawsuits exist so that cases can proceed when costs to individuals of bringing legal action are prohibitive (or at least, in excess of the remedy). Going back to the subscription model, you can walk away from your MMOG subscription (yes, prepayments and lifetime subscriptions are more complicated). You can live without a subscription to PlayStation Plus. But what if Sony's changes to the terms-of-service cause your PlayStation 3 to be less functional that when you purchased it? Will Sony refund your original purchase price? Obviously not. In that situation, a class-action lawsuit is the average PlayStation 3 owner's only real shot at equitable treatment.

This latest terms-of-service update is Sony's effort to claim a lot of leverage. If the clause is enforceable, and Sony need not fear class-action lawsuits, Sony no longer needs to avoid violating the rights of all users. They only have to keep enough people happy to ensure a continuing flow of cash. So, as long as you keep purchasing those exclusive PlayStation 3 titles, you'll use your PlayStation 3 in exactly the way in which Sony wants. And you won't be in a position to object if that changes.

To be fair, this isn't exclusively a Sony problem. This sort of conflict exists with any service that delivers (and maintains) your library of games. Given that digital delivery is the future (if not the already obvious present), this is going to be an ongoing problem. Don't expect that problem to be resolved unless a corporation grievously abuses its position, or a portal goes bankrupt, taking your game purchases with it.

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This page contains a single entry by Editor published on September 19, 2011 4:43 PM.

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