The legal claim is a collective action against Sony and its PlayStation brand, brought by consumer rights expert Alex Neill, which argues that the games console giant breached competition law by unlawfully overcharging PlayStation customers.

The claim alleges Sony abused its market dominant position to impose unfair terms and conditions on PlayStation game developers and publishers, which results in excessive and unfair prices for consumers every time they buy digital games or in-game content from the PlayStation Store. As a result UK consumers have been overcharged for their digital gaming purchases by potentially as much as £5bn over the last six years.

According to the claim filed with the Competition Appeal Tribunal on Friday, anyone in the UK who has purchased digital games or add-on content on their console or via the PlayStation Store since 19 August 2016 is included in the claim and is potentially entitled to compensation. The estimated damages per individual member of the class is between £67 and £562 excluding interest.

Class representative, Alex Neill, commented: “With this legal action I am standing up for the millions of UK people who have been unwittingly overcharged. 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.”

Gaming: from niche to mass market

Gaming is no longer a niche hobby; over 60% of UK adults regularly play a game across either a console or their mobile device and 93% of UK 10-16-year-olds play online games regularly. The industry brings in more than £5bn in yearly revenues in the UK alone.

The business model has shifted for many games companies as some of the most popular games are free to play but rely on in-game spending as the main source of revenue. Players must pay to progress, unlock more features, or customise their experience with new characters or weapons. Commercially, this method of monetisation is far more profitable than simply selling a copy of a game, with $54bn (c.£46bn) generated from in-game purchases in 2020. 

ParentZone, experts who support families in a digital world, reported that children now feel under pressure to make in-game purchases, with almost half believing that video games are only fun when you spend money.

It’s this changing landscape that explains why Alex Neill believes companies like Sony need to be urgently held to account to protect consumers from further harm.

Ms Neill said: “This case goes right to the heart of Sony’s business model. The drive towards in-game purchases allows companies like Sony to profiteer and abuse their power because they have a captive audience.

“Sony knows its customers are hooked once they are part of the PlayStation world and it exploits them with exorbitant charges on every digital purchase.

“Collective proceedings like this are vital because they provide the opportunity for us to hold large companies to account on behalf of consumers who deserve to be treated fairly and get back what they’re owed.”

Natasha Pearman, Milberg London’s partner leading the case, commented: “Sony dominates the digital distribution of PlayStation games and in-game content; it has deployed an anti-competitive strategy which has resulted in excessive prices to customers that are out of all proportion to the costs of Sony providing its services.

“This claim is only possible because of the opt-out collective action regime that was introduced by the Consumer Rights Act 2015; a regime which Alex fought to introduce. We are looking forward to working with Alex and making sure that the regime achieves its aims of protecting and compensating consumers.”

The action is funded by Woodsford - an ESG, access to justice and litigation finance business - so class members are not liable for any of the costs of the legal action.

Charlie Morris, chief investment officer for Woodsford, commented: “Woodsford is proud to be funding Alex Neill and we are determined to help her hold Sony to account for its anti-competitive behaviour.

“Litigation finance of the kind provided by Woodsford is fundamental to these actions; it levels the playing field, provides consumers with equality of arms and affords access to justice so that big businesses like Sony cannot take advantage of consumers in this manner without consequence.”

Robert Palmer QC and Fiona Banks of Monckton Chambers act for Alex Neill, instructed by Milberg.

Anyone who has purchased digital games or in-game content in the UK on their console, via the PlayStation Store since 19 August 2016, is automatically included and potentially entitled to compensation. They do not need to take any further action at this stage.