Microsoft Attempts to Thwart Datel Suit with Motion to Dismiss

[mightbe]

What started with Microsoft patching the 360 to disallow third party memory units has turned into an all out legal battle with Datel suing Microsoft for attempting to monopolize "Multiplayer Online Dedicated Gaming Systems". But "Wait up!", you say? How can they have a monopoly when they share the market space with a bunch of other gaming consoles with online capability? For those of you just tuning into to this legal royal rumble, Datel feels there is a distinction.

Originally Posted by Datel's Lawsuit

Nintendo's Wii system has limited multiplayer functionality and is widely understood to be designed with families and casual gamers in mind. The Wii's reduced functionality and lower price point reflect a target market that is distinct from that of Microsoft's Xbox 360 and Sony's Playstation 3. Accordingly, the Wii is not regarded by consumers as reasonably interchangeable with the Xbox 360 and the Playstation 3, and the cross-elasticity of demand between these products and the Wii is low.

...

Microsoft's actions will leave approximately 50,000 consumers with useless memory cards (and without the ability to access their data on the cards), forestall innovation, and deprive future consumers of the benefits of competition.

Our latest twist in this tale comes courtesy of Microsoft as they attempt to get the suit dismissed. Their reasoning?

Originally Posted by Microsoft's Motion to Dismiss

Datel’s monopolization theory depends on excluding from the relevant market numerous products that fit Datel’s own definition, such as the Nintendo Wii, the Nintendo DS, the Sony PSP, and the Sony PlayStation 2 — all multiplayer online dedicated gaming systems.

Many of these products have outsold the Xbox 360 (perhaps explaining Datel’s desire to exclude them from its constricted market definition). The only rationale Datel provides is that the Nintendo Wii is cheaper and has somewhat less functionality than the Xbox 360. But the law is quite clear that markets cannot be defined 'by price variances or product quality variances. Such distinctions are economically meaningless.'

Maybe this clash over third party accessories and their right to not be engineered against by the platform-maker is over before it even began. I don't think Datel will go out without a fight. If nothing else, it seems to have garnered them a decent amount of publicity and even a bit of goodwill from gamers by depicting themselves as the underdog fighting for lower prices.

So what can we expect in the future from this bitter battle? Perhaps some awesome bit of legal precedent on if the Wii is fit to be classified as the same type of device as an Xbox 360 or PS3? Surely that will finally stop people from arguing about the quality of Nintendo's latest console once and for all.

Source - Seattle PI (1, 2), TechFlash

[Kelegacy]

I hope Microsoft loses. And then maybe, someday, we'll get to see 360 HDDs that aren't bloated rip-offs. I'd like to see more 3rd party choices, not less.

[Talanvor]

I agree, Microsoft screwing around with third party accessories is bullshit.

[Evil Avnovice]

[RandoM51]

I'd be on MS' side if this stuff didn't work from day one. Purposely breaking support for products already in the hands of your customers though is evil(tm).

[MagGnome]

I also hope MS loses. 3rd party accessories on the consoles usually aren't all that stellar, but at least they are priced reasonably, unlike first party ones.

[mightbe]

I think it's important to note that these are *unlicensed* peripherals that they're blocking, not simply legitimate third party items.

Because Datel did not pay money to make a product officially compatible with the 360, I think legally it's fine for MS to drop the hammer on them.

It's still a jerky move by MS to do it so late in the game.