Sony in the Killzone: case over resolution continues

Ladore v. Sony Computer Entertainment America, LLC, 2014 WL 7187159, No. C–14–3530 (N.D. Cal. Dec. 16, 2014)
Ladore sued Sony for allegedly false advertising of its video game Killzone: Shadow Fall. Sony allegedly represented that Killzone’s “multiplayer” mode renders graphics in full (or “native”) 1080p resolution, when in fact Killzone’s multiplayer graphics are rendered with significantly less resolution than advertised.
The court largely refused to dismiss the complaint, except for the negligent misrepresentation claim.
Sony launched the PS4 in 2013, almost at the same time as the competing Xbox One.  The focus of the “console battle” allegedly was on performance, including resolution as a key indicator.  Resolution measures image clarity, and typically depends on the number of pixels.  A monitor that displays 1,920 lines of pixels in the vertical direction and 1,080 lines of pixels in the horizontal direction is called “1080p,” while 1,280 by 720 is “720p.” 1080p allegedly offers “double the graphical detail” as one displayed in 720p.
An image originally created or rendered at a lower resolution can be displayed at 1080p by using interpolation, a “common name for methods that attempt to fill in blank pixels that are created when an image is transformed from a lower resolution to a higher resolution.” Algorithms guess what pixels should look like by analyzing nearby pixels.  But some believe that using interpolation is a “horrible kludge that results in soft, slightly blurry images.”
Guerrilla Games, a Sony subsidiary, developed Killzone, released for sale along with the debut of the PS4. Marketing allegedly focused heavily on Killzone’s claimed ability to render the game in multiplayer mode at “native 1080p” resolution.  This was material because the PS4 was supposed to be “more powerful in graphical terms” than the competing Xbox One, and Sony allegedly wanted Killzone to be a “showcase for the PS4’s technical capabilities.”  
Ladore alleged that he read numerous internet accounts—many published by Sony or citing statements made by Sony employees—representing that Killzone’s multiplayer mode would render graphics in “native 1080p and 60 fps [i.e., frames per second].” For instance, a “Killzone director” reportedly told an “official” PlayStation news site that “the first thing that people notice is fidelity … Killzone is running in 1080p, whereas the last game was running in 720p.” Describing a demonstration/teaser version, Sony wrote on its website that “[a]s you can probably tell from the footage, Killzone Shadow Fall multiplayer outputs at a native 1080p, rendering uncapped but always targeting 60 [frames per second].”
Ladore allegedly relied on these reports, and also examined the packaging, which appeared to confirm the native 1080p misrepresentation:

He bought the game and opened the package, rendering it unreturnable, then realized that the multiplayer graphics were blurry and not native 1080p.  Others noticed the same problem, including video game critics.  Eventually, reported that Killzone used interpolation for the multiplayer mode, and a Killzone producer allegedly confirmed this, conceding that “[n]ative is often used to indicate images that are not scaled,” and “[i]f native means that every part of the pipeline is 1080p, then [interpolation] is not native.” The producer continued: “[w]e recognize the community’s degree of investment on this matter, and that the conventional terminology used before may be too vague to effectively convey what’s going on under the hood. As such we will do out best to be more precise with our language in the future,” though the producer contended that interpolation “gave substantially similar results” to rendering in full/native 1080p.
Ladore alleged that, had he known the truth, he wouldn’t have bought Killzone or would have paid substantially less for it.
Sony argued that there was no misrepresentation, in that Killzone output 1080p in multiplayer mode.  That misunderstood the gravamen of the complaint and ignored critical factual assertions that were properly alleged.  Ladore didn’t allege misrepresentations about final output resolution, but rather about the creation/rendering of the multiplayer graphics, represented to be 1080p when they weren’t.  Sony’s own words indicated that the method it used appeared “subjectively similar” to 1080p, though Ladore characterized the resulting images as subpar. The misrepresentation concerned native 1080p, contrasted to interpolation.  Indeed, arguably Killzone didn’t “output” video at all—the PS4 does.  Ladore’s allegations concerned the resolution of the images first rendered by the game software, not the ultimate resolution on his TV set.  Even if interpolation produces 1080p images, that doesn’t undercut claims that Sony affirmatively misled Ladore about the ultimate quality of the graphics Killzone offered.
In addition, the complaint adequately pled reliance, despite Sony’s argument that the statement on its box said nothing explicit about how Killzone’s graphics are rendered. Ladore pled that he examined several pre-release statements, including a statement attributed to Sony’s Social Media Manager that “competitive multiplayer mode … runs at native 1080p.” Ladore alleged that he read the packaging, which corroborated (or at least did not affirmatively correct) Sony’s earlier misrepresentations, and bought the game.  That was enough.
Plus, even if Ladore simply alleged reliance on the box, that likely would have been enough to survive a motion to dismiss. “Because the PS4 is capable of outputting all games at 1080p, a specific representation on a particular game that the output is 1080p would likely convey to the average consumer that the particular game’s graphics are, in fact, natively rendered at 1080p. A completely unqualified legend, like the one at issue here, would have no real meaning if it could be applied to all PlayStation games, including the substantial majority of games that do not natively render in 1080p.”  The complaint, in fact, alleged that Sony used a different on-box label for games that didn’t render natively in 1080p.
Sony also argued that it disclosed that Killzone used interpolation in multiplayer mode in at least two posts in March 2014, two months before Ladore’s purchase.  Sony’s act of “coming clean” didn’t make Ladore’s reliance unreasonable as a matter of law.  Ladore alleged that he read the misrepresenations, but not that he read or became aware of Sony’s corrections until he sued. Sony’s argument was inappropriate at the motion to dismiss stage.
The court also found Killzoneto be a “good” under the CLRA because it came on a physical disc.  Ladore didn’t simply buy or download intangible software or play an online game.  He went to a brick and mortar store and received the disc in a box, accompanied by tangible documentation.  Sony’s argument that the disc was nothing but a physical mechanism for delivering an intangible right to use software was wrong, because if it were accepted, many tangible commodities could be so recharacterized.  A book is a tangible chattel, even though the physical object is a “delivery mechanism” for information.  Insurance contracts and credit cards are by contrast not delivery mechanisms; they are physical representations of intangible agreements.  Discs and books don’t memorialize or prove the existence of an agreement; they are objects that can be possessed or used, and that’s why people buy them.

However, the economic loss rule barred Ladore’s negligent misrepresentation as presently pleaded.

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