GameStop reaches settlement on DLC for used games, must label/warn customers of online passes in California

SAN FRANCISCO--(BUSINESS WIRE)--Yesterday, in the United States District Court for the Northern District of California, Senior District Judge Thelton E. Henderson entered an order preliminarily approving a class action settlement Baron and Budd reached with GameStop Corporation, the world’s largest video game retailer. The settlement concerns used video games sold by GameStop to consumers who are unable to access certain downloadable content and online features (DLC) unless they pay an additional $15, even though the packaging of the video games claims that the DLC is available for free with the purchase of the game.

Under the settlement, GameStop must, for the next two years, post signs on the shelves where used games are sold in California stores, and online, warning consumers that certain downloadable content may require an additional purchase.

Additionally, as part of the settlement, consumers will have the opportunity to recover the additional $15 they would have been required to pay to access the downloadable content. Consumers who purchased qualifying used games and who are enrolled in GameStop’s “PowerUp Rewards” customer loyalty program can receive a $10 check and a $5 coupon. Consumers who purchased a qualifying game, but are not members of GameStop’s loyalty program, can receive a $5 check and a $10 coupon.

“We are pleased that as a result of this lawsuit, we were able to obtain complete restitution for consumers, with actual money paid out to people who were harmed by GameStop’s conduct,” said Mark Pifko, Baron and Budd attorney and counsel in the lawsuit. “The in-store and online warnings are an important benefit under the settlement as well, because if GameStop discloses the truth to consumers, it is unlikely that they will be able to continue selling used copies of certain games for only $5 less than the price of a new copy. In fact, we already know that not long after the lawsuit was filed, GameStop lowered prices for used copies of many of the game titles identified in the lawsuit.”

According to the lawsuit, GameStop purchases used video games from consumers for only a fraction of the original price, and then sells them to other consumers at a marked-up price, usually around $5 less than the price of a new game, to maximize their profits. Utilizing this practice, GameStop makes more than $2 billion a year on used video game sales, without paying any royalties to video game publishers or developers, the lawsuit alleged.

If you believe you have been affected by GameStop’s policies, visit http://www.facebook.com/gamestop.settlement to learn more about this settlement, find out how to recover lost funds from GameStop, or to keep up with the latest about the settlement.

Although this settlement only applies to California consumers, Baron and Budd is investigating similar GameStop practices in other states. If you live outside of California and have experienced the same issue at your local GameStop, contact Baron and Budd at 1.866.844.4556 or via email at info@baronbudd.com for a free legal consultation.