Analyzing the Sony Controversy

Some of Sony’s recent business decisions have caused an uproar on the internet. This has provided both an opportunity both for learning, and potentially updating consumer protection laws.

The Situation

Around June 25, 2026, multiple individuals on social media posted messages they received from Sony stating:

“Dear (Name)

As of 1 September 2026 due to our contract licensing arrangements, you will no longer be able to watch any of your previously purchased Studio Canal content and the content will be removed from your video library.

Click here from a full list that will no longer be supported.

Thank you,

PlayStation Store”

The logo and slogan contained in the message at the bottom have been included because they become relevant later.

A few days later on July 1, 2026 Sony then released the following in their PlayStation Blog:

Title: “Physical disc production ending in January 2028 for new games releasing on PlayStation consoles.”

Content: “In response to shifting trends in consumer preference, new games will be released on PlayStation Store and at retailers in digital formats only.”

The combination of these things (and some context that will be provided shortly) is the general reaction from consumers that Sony intends to effectively force them to ‘rent’ games which can later be pulled from their library.

This is being viewed as a fundamental threat to consumer rights and ownership. The slogan “Play has no limits” in particular has been mocked as consumers have identified that play does in-fact seem to have limits.

Context and background:

The industry trend

Since the mid 2000s, video games and entertainment media more broadly have become increasingly digital. The introduction of live-service games, and alternative monetization models to the initial single purchase have become mainstream.

Broadly speaking there are four monetization models for entertainment media (sometimes multiple are used simultaneously):

1. Initial purchase or box-price.

2. Subscription

3. Microtransactions

4. Advertising

5. Data collection

The most successful games in the market currently are free-to-play live service games that primarily monetize through microtransactions and data collection.

Due to the low barrier to entry, these games often also contain the most concurrent players and largest consumer-bases globally.

Stop Killing Games

In 2024 Ross William Scott started the consumer movement Stop Killing Games. It was initially done in response to the shutdown of The Crew, a videogame released in 2014.

The Crew is a mainly single-player game which required a constant internet connection to play. In 2014 it cost $59.99 USD and was a single purchase.

In 2024 Ubisoft shut down the servers and revoked the license from all users. This made the game unplayable.

Stop Killing Games is particularly relevant as it contains multiple examples that predate the Sony controversy, has potential remedies it suggests, and is attempting to address the issue by going directly to lawmakers.

Intellectual Property and Licensing

This issue has three components:

1. What licenses are and how they are worded.

2. The practicality of enforcing them.

3. Government’s Role

Licenses and wording

Physical media is a good place to start to understand this. Generally speaking, when one purchases physical media (movie, video game, educational software on a disc, etc.) they both own and do not own it.

More specifically, they physically own the disk but they do not own the intellectual property contained on the disk.

Technically, they are issued a very specific license to use the disk for a very specific purpose and are explicitly disallowed from doing other things. Allowed to view or play, but not allowed to copy or modify is an example.

While a license is “an official document or agreement that grants an individual formal permission to do, own, or use something”, in this instance the license is fairly restrictive.

Almost all of these licenses contain a clause stating that they are revocable. In-fact, if one was to look at an old PlayStation 1 or 2 game and were to check the printed license description on the back of the box, it additionally says that the license is only permitted on the NTSC U/C designation only.

U/C refers to United States or Canada, this part changes if purchased in a different country, as it is a different license. Technically, if one has purchased a copy of the game from a different market, and uses it on the incorrect hardware, they are violating this license agreement.

This is important to note because from a video game company’s position, no one ever fully owns a game, the game can be ‘taken back’ at any time, regardless of reason and regardless of if it is a physical copy or not.

Take this one step further and remove the physical copy, it is not difficult to see why a company would assume the position that nothing functionally changes between a digital or physical copy.

Practical reality of licenses

Now in practice, this is different. Assume a company revokes a license for a physical copy. In many cases the enforcement of this is effectively impossible, the individual can simply ignore the company and either:

1. Use the product anyways, how are they going to know?

2. Call the company’s bluff and effectively state ‘prove it and sue me’.

Conversely, when the media is perpetually dependent on a service provided by the company this dynamic flips. Instead, the company can prevent the media from being accessed and can say to the customer:

1. Please read our terms of service and licensing agreement on your expired item. Also buy this hot new title we just released, (the game you just lost) version two!

2. Call the consumer’s bluff and effectively say ‘if you think I can’t do this prove it and sue me’.

Role of Government

All of these modern license agreements state something similar to what Sony’s version 2.0 license agreement states in relation to government (usually in bold type or all capitals):

“IN ADDITION, AS A CONSUMER YOU MAY HAVE RIGHTS UNDER APPLICABLE LOCAL LAWS THAT CANNOT BE EXCLUDED, LIMITED OR CHANGED. THOSE RIGHTS TAKE PRIORITY OVER ANYTHING IN THIS AGREEMENT.”

This is the crux of government’s importance. Everything a company wants to do is subject to the jurisdiction it is operating within. A company will always follow government regulations, it is forced to if it wants to operate in the country. If this is not true it is either because:

1. The company is more powerful than the country. Keep in mind that with the police and the military a country generally has a monopoly on violence within its jurisdiction so this is extremely unlikely, especially in developed nations.

2. The company would rather ‘pay the fine’. This happens when regulations do not sufficiently modify behaviour. Consider, in paying the fine the company is technically following the regulation, they are just effectively choosing ‘option B’.

3. The company doesn’t operate in the country.

That last one is going to be explored a bit more. Consider, what if there is no possible legal way to obtain the media because the company is not willing to comply with the country’s regulation to operate within it?

Any international treaties towards copyright protections would still likely apply, but is it theft?

This point is actually a pivotal argument made for preservation of media broadly by libraries, archives, and preservation organizations.

Further, a country is not likely to be particularly motivated to side with a company that doesn’t operate within it against its citizenry. This doesn’t benefit the state.

Analysis

When looking at the Sony controversy people tend to fall into a few categories:

1. The physical copy collector that is being told they can no longer collect.

This individual is generally quite disappointed at a minimum.

2. People concerned with consumer protection laws and right-to-own.

Sometimes this is conflated with physical owners, but the issues are different. The physical copy is a proxy for this different underlying issue. This group also includes people who do not play video games.

3. Video game consumers that do not care.

This is likely the overwhelming majority. For many, even if they say they care it is likely this will not change their buying patterns.

4. Everybody else.

People that don’t play video games and don’t otherwise care about consumer protection laws. They are generally indifferent to the issue.

Looking at Sony’s perspective.

Taking a communications lens, two possibilities immediately come to mind. Consider it could be that:

a) Sony is a large organization, and two different departments coincidentally released this information so quickly together, accidently magnifying the story.

b) Sony coordinated the release of both of the events and did an internal risk evaluation. By releasing everything simultaneously it does magnify the story, but it also puts everything together. 

By just getting it all out there at the same time, the most prominent story may take the heat off of less prominent issues, and those issues may fly ‘under the radar’. This is a known communications tactic when needing to break multiple pieces of bad news, people only have so much bandwidth, exhaust it and they will forget or ignore things.

As to why Sony did what it did with each event:

In the case of the Studio Canal content, it is likely that the original Copyright holder (Studio Canal) pulled the distribution license they gave to Sony. In this instance, Sony is forced to stop distribution. 

Now, given that the September 1, 2026 date is known, but the contact is not known, a question remains: Why not just let existing users download all the content before September 1, 2026?

There are two reasons why this may not be the case.

The first, Studio Canal may have explicitly forbidden this in the distribution agreement.

The second, Digital Rights Management (DRM).

Now before explaining out DRM, preface is going to be given that if a company wants to, they can allow the customer to download an encrypted file and a perpetual decryption license. This license is stored offline on the customer’s device locally.

DRM is a suite of technologies that control how digital content is accessed, modified, and distributed.

Publishers and copyright holders generally like it as it helps protect their copyright.

Consumers generally dislike it as it often:

Impairs the functionality of the product: crashes, glitches, power consumption increase, other performance issues.

Is inconvenient: Additional menus and hassle to access media. Also, they almost all require internet connections and access to an external system.

Use restrictions: It can make it difficult to resell or share media, backup files, modify files, etc.

Feels like a lack of control: It makes them feel as if they do not own the thing they bought. There is also a fear of the media going end of service and being unavailable at any time.

DRM becomes really important to this controversy because it is usually the mechanism that makes the enforcement of the license practical. The way companies navigate the situation that has been created based on the particular DRM that is being used becomes the practical issue.

From a digital entertainment company’s perspective:

Most of their market and their potential market is likely to be individuals that do not care enough to change their buying patterns. Once a piece of media is no longer financially sustainable to maintain, the customer base (and/or their willingness to continually buy) is generally thought to be so low, that even if they make them angry, it does not effectively matter. They are not significant repeat customers anyways.

These companies will target whatever consumers are most likely to give them the greatest return on investment and will be primarily constrained that the rules said consumers’ government force on the company.

From the consumers perspective:

Getting lost in the nuance of DRM is not likely the most productive pathway. If a consumer is primarily concerned with right to own they have a few different options:

1. Vote with one’s wallet. Don’t buy something if one doesn’t want it. If the requirement is that the consumer owns the media, and the company is not willing to sell ownership, then they aren’t selling a product the consumer wants. 

2. Pirate. Get a fun hat, an eyepatch and a peg-leg. Follow the popular internet sentiment “if buy isn’t owning, then piracy isn’t stealing”. 

Is this legally correct? not really. Is it illegal? probably. From a risk perspective is the company going to spend more money on lawyers than a person has to collect to go after them? usually not.

3. Change the law. Work within whatever government system regulated consumer protections and change the law.

More on piracy:

This is generally going to be the strategy adopted by the people who aren’t sufficiently able to vote with their wallet. An interesting note in piracy, sometimes it is actually an accepted part of a company’s market strategy. Bill Gates was quoted in the 1990s on discussing Windows software piracy:

“And as long as they're going to steal it, we want them to steal ours. They'll get sort of addicted, and then we'll somehow figure out how to collect sometime in the next decade.”

Other companies like Studio Projekt Red have had a similar approach, releasing patches that even work for pirated versions. The response to this has been generally positive with multiple reviews of the game essentially saying “we pirated this game and then liked it so much that we bought multiple copies after”.

More on changing the law:

Changing the law will require educating lawmakers on the issue. It will also involve all the regular trials and tribulations that come will politics and policy. The most productive end result will likely be something that it extremely simple.

If the resulting law is something highly convoluted and focuses on DRM, there is potential that additional loopholes will be simultaneously created.

Instead, if the law focuses on right to own and makes certain types of licences perpetual and irrevocable automatically then this would supersede the entertainment companies’ end user licence agreements (EULA), and the companies would comply.

If one gets into the nuance of the Stop Killing Games consumer movement, they actually have quite a few suggestions and lay out the issue fairly well. As far as social movements that look to change legislation go, this one actually seems fairly measured and reasonable.

Currently in California, United States of America, the “Protect Our Games Act” is making its way through the legislative process. This is spearheaded by the same consumer movement. If California changes the law, the size of the market will likely force companies to change their services for the entire American market.

This change would then likely create a domino-effect across much of the western world. If anyone is particularly animated about this, that would likely be a productive place to start.

Vezina is the CEO of Prepared Canada Corp. and is the author of Continuity 101. He can be reached at info@prepared.ca.