"In the end, they always seem to get what they want, and the Law itself seems to have lost impact in recent years."
Sony have displayed an unpleasant attitude towards some retailers in the recent past - but this summer saw one of their most seemingly over-the-top actions yet; the commencement of legal actions against popular online retailer Lik-Sang. The charge? The selling of PSP consoles overseas; a strange qualm given that that's the whole point of Lik-Sang, and providing importers with consoles and games as yet unavailable to them is something they've been doing for a long time. Lik-Sang has found itself in hot water with console manufacturers before; we contacted them to find out how they're going to handle this latest legislative tussle.
What are Sony's actual accusations?
If you believe it or not, their accusations are as vague as we stated in our press notice. They are basically accusing us of "unlawful economical interference", by selling PSPs to customers living in territories were they didn’t yet approve a release or released the systems by themselves. They base their claim on their allegation that Lik Sang advertised the PSP in a "dishonest manner", which they will have to explain at a later stage. The suit is still in a very early stage, and their full argumentation is not yet available to us.
Was Lik-Sang surprised by Sony's move, considering the various other moves against importers they have taken over the summer?
The UK and Hong Kong have very different legislations in place, as far as I know. While there are precedents of console distributors going after local UK shops offering import goods from local shelves, I do believe that it is the first time in History that a Hong Kong company is actually worried about the activity of selling legitimate goods. Hong Kong is proud of its open market and free trade, and hence this lawsuit comes as a total surprise to Lik-Sang.com.
The laws are clear when it comes to parallel trade. Hong Kong's legislation is based on the fact that allowing parallel and free trade will restore natural competition and benefit consumers with lower prices. Hong Kong, one of the pioneering countries respecting worldwide exhaustion of trademark rights, allows free trade once an item entered the market for sale.
Do you accept that you were doing Sony a disservice by negatively affecting European PSP launch numbers with your facilitation of Japanese PSP consoles? Can you understand why they would want to stop such actions?
I can’t understand this claim at all. Lik Sang is not the only way how consoles get into Europe. People bring them in planes, buy them on eBay, or get them from their sales rep or marketing guy before release. And at the end, I think these few units are not even noticeable on Sony’s big plan and sales charts. They help and even hype the launch if you ask me.
The folks who get their PSPs from Lik-Sang.com are often import gamers for years, or at least part of the hardcore gaming microcosm. Many of them work in the videogames industry, possibly even for one of the big publishers or manufacturers, and wouldn't want to wait until September 1. It's the very reason why they are in the games industry, to get their hands on new games and consoles the day they are released. They would get it anyway and no one could stop them.
Just take these people who got their system end of last year when its price tag was still sky-high: half of their December salary went into a brand new PSP system with a couple of Japanese games, a huge Memory Stick and not to forget, to the UK customs for import duties and charges. This is not only something they have to explain to their girlfriends, it also triggers the question "who those people are". If someone goes through the hassle of getting a Japanese system from the other side of the world with all strings attached, he is the biggest fan on earth.
What I really don't get is why and how a large entity involved into the business of installing a console base, who face aggressive competition from powerful challengers at it, and whose sales forecasts are in millions and millions of units, has any time to care about the marginal effect of import sales to hardcore gamers who just can't wait for the industry calendar to fit with the mass-market rhythm. Maybe it is not clear to them that import gaming always has been, is presently and always will be a niche, consisting of only a very small fraction of the complete market.
I am even convinced that the few Japanese games and consoles making it to Europe ahead of official release help in preparing the promotion and building the word-of-mouth for a successful launch. Not only the product is in the magazines and presented on TV but is also in the hands of happy few who show if off around to their friends at school, at work, in the streets and in the underground, letting them drool and make up their own mind about getting one themselves… when it's out in the UK. As a matter of fact, when one hardcore gamer will receive a new cool system or game from Japan, out of 10 friends he will demonstrate it to, he will only convince one or two to jump and get it from Asia too. The other 8 to 9 friends, casual gamers, will not dare to order from a place located 10.000 kilometers away and with oceans and boarders in between. These lads will just wait desperately for the local supermarket to stock some. I want to emphasize the word "desperately" in the latter sentence, as this word would have to be omitted if there were no import gamers and if the product was currently only visible in magazines and catalogues for masses.
Are you confident you can beat Sony in court?
Let me put it this way: If Lik-Sang.com loses this case, then gamers, the industry and Hong Kong lose as well. It would be a big step backwards for everybody but Sony of Europe (SCEE). Laws that have been put in place by the legislators in favor of consumers and to open the market would have to be overthrown for Sony if they want to prevent us from freely trading with legitimate goods that they sold on the open market.
Now, the fact is and remains that multinational giants such as Sony have a huge budget to fight cases like this, and to lobby their way through law changes around the world. The so-called "think thanks" even play a big role when new laws are drafted nowadays, to make sure their economic interests are reflected in the very core of each important market of the world. Sony fights far bigger cases all around the world, and as you know by yourself, small companies such as ours are often forced to give it up after the first round no matter if they are right or not (just take Bleem inc as an example). Sony's bigger enemies usually settle out of court after both showed off their muscles back and forth for a while, as it makes no sense for two equally strong opponents to waste any time in court that could go on forever. And even if at the end you find your way to prevail, it often happens that these sued companies just get bought up by giant Sony (Connectix). In the end, they always seem to get what they want, and the Law itself seems to have lost impact in recent years.
In Lik-Sang's case, it seems to be rather clear to me, and my colleagues, as laymen. We are just doing our job, and we can assure you that we are not doing anything wrong. At the end it will be a judge who has to decide for or against Sony. As it stands now, Hong Kong has clearly decided against them by expressly permitting parallel trade. Lik-Sang.com might just be a vehicle for Sony, because they can't sue the government of Hong Kong for allowing parallel trade and for their "unlawful interference of Sony's Economic interests" [quoting Sony's claims].
Sony claim that you advertised their PSP products in a "dishonest manner" - what do you think they're referring to here?
I have no clue. I would be very grateful if somebody could explain this to me in a meaningful way. I am positive that this claim is probably groundless. They're giving it a shot. Did you see any dishonest advertising by Lik-Sang lately? I didn't. I never did.
Has Lik-Sang had to deal with any similar attempts from companies to block the importing of their products in the past - purely on an apparent financial reasoning?
Not at all. We have several developers, employees from publishing companies (large or small), Senior Managers of manufacturers, or of their subsidiary companies distributing systems across Europe and USA, who are ordering from us on a regular basis. Same applies to press members, journalists and all types of industry insiders. Mostly any company in business within the video games industry nowadays, has received at different point in time some shipments from Lik Sang. These parcels were delivered to their offices, either for their professional needs, or for one or several of their employees, sometimes at management level.
Just put yourself into the shoes of a developer in Japan. If your title is released in Japan first and the international community represented by import gamers is raving your game already when it's not even released in their territory, it just makes you proud. And it's not that all import games are sold in thousands, we serve a very small customer base that doesn't change the big picture for the publishers at the end.
Revolution Europe would like to thank our good friend Pascal for answering our questions. Cheers!
