Chapter 1-3

Memorandum

Re: Sony PS3 “ Other OS” Litigation - Chapter 22

Statement of Facts

In 2006 Sony Computer Entertainment America LLC made their gaming system PlayStation 3 (PS3) available for purchase claiming that it would be the most advanced gaming system on the market that would last generations. It boasted its futuristic performance capabilities through its ability of accessing an online gaming network called PlayStation Network (PSN) as well as an “Other OS” feature. It made a claim to consumers that this system would last for ten years, but within the product licence and terms of service it mentioned that operating updates may cause loss of functionality on some of the features. In 2010 Sony released a software updated on the PS3 that

would improve the online gaming experience but then disable the Other OS features. Should consumers choose to forgo the update they would then maintain the Other OS feature but they would lose access to the PSN. Upset with the terms of the update a group of gamers sued Sony on the platform that they breached an expressed warranty when they promised that the system would last for ten years and only after four years with the system update most of the functionality was immobilized.

Questions Presented

Does Sony’s statement that the PS3 gaming unit will have a ten year lifespan create an expressed warranty that covers not only the unit itself but all features including the operating system and access to the gaming network?

Plaintiff’’s Argument

The PS3 owners argument is that the statement by Sony of owning the device for ten years encompassed all the features of the system meaning that access to the PSN and the Other OS was part of the deal between consumers and Sony when they made that assertion. They exemplified this point by presenting the example of a Hybrid Car manufacturer disabling the battery system after a few years rendering the Hybrid Car to operate on fuel alone, undermining the fundamental nature of the product, which they claimed is what Sony did when they issued the update. Thus breaching the expressed warranty on the device.

Defendant's Argument

Sony’s claim on the ten year lifespan only covered the physical device and not the features included. They stated in their counter argument that the promise they made did not act as an expressed warranty since their terms of services and license agreement expressly stated that updates may cause some loss of functionality.

Summary of the

Decision

In 2011 the district court dismissed the case stating there was not enough evidence to hold Sony liable. After an appeal in 2014 the judge found that the gamers made enough of a case to hold Sony liable for the loss of functionality in the update. In 2016 Sony settled with users who utilize the Other OS component of the system, paying out up to fifty five dollars to any users who can provide evidence of the purchase date as well as their reliance on the added features.

Clerk’s Explanation

The 2014 judgement is correct because Sony in its claim on the lifespan of the product indeed created an expressed warranty on the device and all it’s features.

In order to better understand this claim it is imperative to understand the attributes of an expressed warranty. An expressed warranty is created when a seller either with his words or actions clearly indicates to the buyer that the goods they are selling will meet certain standards. The UCC further defines this with three attributes, the affirmation of fact or promise, the description of the goods, and lastly with a sample or model. The UCC not only uses those criterias but also established that these features were the basis of the bargain between the consumer and

manufacturer.
In the Sony case the affirmation of fact or promise was confirmed under the principle that defects were not obvious, that fundamental features, the Other OS, of the product were rendered inoperable after the update was issued was not implied in the license agreement which only stated some loss of functionality and not the complete removal of a basic feature. Sony also created and expressed warranty when they announced their claim that the PS3 would last for ten years, giving the device a specific quality that consumers relied on.
Lastly the PS3 device operated as claimed for four years, when the update was issued it changed the standard features of the device making it difficult for consumers to either use the Other OS or the PSN changing the sample that gamers were used to in the initial years of the system. Consumers who purchased this product from Sony relied mostly on the basis of the bargain, which was the PS3 would last ten years under the assumption of all the features such as the PSN and Other OS would also last ten years. The gamers who brought on the case made the claim that they would not have purchased the device had they known these features would be changed contingent on updates creating an expressed warranty with Sony.