Sony’s PS5 disc phaseout draws $457 million Dutch lawsuit

Sony’s plan to stop releasing new PlayStation 5 games on physical discs by January 2028 has prompted a $457 million lawsuit in the Netherlands. Fortune reported that the case raises a direct challenge to Sony’s pricing power as the company shifts more game sales into its own digital store.

Dutch consumer group Stichting Massaschade & Consument filed the lawsuit Tuesday on behalf of 1.7 million Dutch PlayStation users, according to Fortune. The group argues that Sony’s 30% commission on PlayStation Store sales could push up game prices once disc-based options are gone.

Fortune reported that Sony’s announcement has also drawn anger from players on the PlayStation blog, where commenters criticized the loss of discs and warned they might stop buying PlayStation products. The dispute centers on a practical issue for players: physical games can be resold, rented or bought second-hand, while digital PlayStation games are sold through Sony’s storefront.

Why discs matter in the legal fight

Andrew Ching, marketing chair at Johns Hopkins Carey Business School, told Fortune that Sony’s 30% fee applies to digital downloads sold through the PlayStation Store. Ching said physical retailers pay Sony a lower flat royalty tied to manufactured copies, creating a different pricing structure from digital sales.

Ching told Fortune that physical copies, especially used games, give price-sensitive players an alternative to buying at full digital price. Fortune reported that Sony has used the existence of physical retail and resale markets as part of its past defense against antitrust claims, arguing that those channels show competition still exists.

Ching said Sony weakens that argument by removing discs from the market, according to Fortune. Without physical copies, players who want PlayStation games would have fewer options outside Sony’s own store, he told the publication.

Sony has pointed to consumer behavior in explaining the shift, Fortune reported, with about 85% of PlayStation game sales already digital. Ching told Fortune that the remaining 15% of buyers still represent a meaningful group, especially because some players value the ability to resell games after playing them.

Ching gave Fortune an example of the economics: a player who buys a $60 game and later trades it in for about $20 has effectively paid $40. If resale disappears, he said, some buyers may buy fewer games or consider other consoles.

Xbox has an opening, but faces its own pressure

Fortune reported that Sony’s backlash could give Microsoft’s Xbox a chance to reassure players that it will keep supporting physical games. Ching told Fortune that Xbox could use that promise to appeal to PlayStation users upset by Sony’s plan.

Microsoft has faced a similar controversy before, Fortune reported. In 2013, Xbox One restrictions drew player anger, while Sony publicly emphasized disc support, according to Fortune.

Fortune also reported that Xbox is dealing with major internal changes. Microsoft Xbox CEO Asha Sharma told Fortune the division was restructuring, with about 3,200 layoffs, or 20% of staff, and four studios being spun off as part of wider Microsoft cuts.

Sharma told Fortune that Xbox had spread itself too thin while trying to grow. Fortune reported that Xbox gaming revenue fell, including a 33% decline in hardware revenue, and that annual revenue had dropped by nearly half a billion dollars despite more than $20 billion in content and hardware investment over five years.

Publishers shift toward add-ons

Ching told Fortune that Sony, Xbox and game publishers are also relying more on downloadable content for existing hits instead of funding new titles. He said a major new game can take up to six years and hundreds of millions of dollars to make, while an expansion for an established title carries less demand risk.

Ching told Fortune that this model can mean fewer new games and less spending on original storylines and features. He said some consumers now view the first purchase of a game as an entry charge followed by more payments, rather than a complete product they can finish and leave behind.

Fortune reported that Microsoft and Sony did not respond to its requests for comment.

This story draws on original reporting from Fortune.