Monday, February 28, 2011

PlayStation 3 banned in Europe

European customs officers have been ordered to seize shipments of PlayStation 3s after LG won a preliminary injunction against Sony in an acrimonious patent battle between the two Asian electronics giants. The ruling by the civil court of justice in the Hague means that all new PS3s have to be confiscated as they are imported into the UK and the rest of Europe for at least 10 days. If the injunction was extended it could mean consoles disappearing from high street shelves. It is understood that Sony and computer games retailers typically have about two to three weeks' worth of PS3s in stock across the continent. Tens of thousands of PS3s were seized by customs officers last week in the Netherlands, the Guardian has learnt, in a dispute that centers on Sony's allegedly infringing use of Blu-ray technology belonging to LG.

 Not to long ago Sony was sued by LG for patent violation relating to the PS3's Blu-ray system. As LG pushed to get the popular gaming system removed from store shelves in the US, they did not have to push in Europe. Europe has issued a 10 day ban on the game system's imports and sales, this ban is subject to a pending extension. This is devastating news for the Japan based company Sony, prior to the ban around 100,000 PS3 consoles were imported into Europe every week. This massive loss of profit for the company could spell trouble, and if the product is not removed from US stores, and this patent case is not completed within a short amount of time we can expect to see a price increase in all of Sony's products to compensate for the reduction of the available market. However being this company has such a large supply of other products from Tv's, portable game systems, and mobile devices it will not cause the company to go out, it will just cause it to have to cope with reduced profits for the next few days, weeks, or even months.

8 comments:

Elizabeth said...

If this ban continues, customers may seek other products to replace their confiscated ones. While they are waiting for their PS3s to come back into circulation, they may begin to prefer the replacement product. The ban may also have the opposite effect. The customers may begin to 'miss' the product they took for granted and when it is re-released, they will loyally buy the product.

kern said...

This is an interesting article as I didn't realize this was happening. Do you think patents are an important part of a market economy?

Smith said...

I see how prices could increase for PS3s. However, could you foresee the prices dropping in this situations and how?

Matthew said...

@Kern, patents are a very important part of the worlds economy. They prevent companies from claiming they created something and gaining a large market share when they just created a copy of another companies product. Patents are in effect government backed certifications on products saying this entity owns them and if you decide you wish to claim them you are liable to pay them royalties on the products you sell or your product will be removed from the market. Patents can cause companies to gain massive profits or cause others to loose a large amount of their expected profit to compensate the original creator.


@Smith, the only way I could see prices of the PS3 or other Sony products to drop for compensation is if they want to attract more consumers to buy their products. Being that they already product those one-hundred thousand PS3's for Europe a week that are not being sold why not just drop the price and push them to other areas in the world? That might just work to supplement the cost of production.

Garrett T. said...

This is like Motorola suing Tivo, tech companies sue each other constantly over patents and over devices. It's not surprising and I doubt that LG can win this. If they do win it and Sony is sued out of house and home that is just more jobs that the country loses. And then we drop back into the trough of recession.

Cameron Casey said...

First of all, I think you did an excelent job writing this blog post. I can't believe that it is even possible to ban an entire console. I don't think this ban will continue. Maybe the people of Europe will start an underground Ps3 market. That would be cool.

Matthew said...

@Garret, If LG actually is looking like they will win, I feel that a settlement will tried to be reached to save money and save face for the companies so neither one will go out of business keeping the jobs and that part of the economy up ad functional.


@ Cameron, thank you for your feed back. I agree completely, I have never expected to see an entire game console get banned anywhere much less an entire continent. Also if an underground network hasn't started yet, I expect it will soon especially if the ban is extended. I know that a underground network for games and consoles exist so the foundation for it is already there.

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