Ladore v. Sony Computer Entm't Am., LLC, C-14-3530 EMC

• Decision Date: 16 December 2014
• Docket Number: No. C-14-3530 EMC,C-14-3530 EMC
• Court: U.S. District Court — Northern District of California
• Parties: DOUGLAS LADORE, individually and on behalf of all others similarly situated, Plaintiff, v. SONY COMPUTER ENTERTAINMENT AMERICA, LLC, Defendant.

DOUGLAS LADORE, individually and on behalf of all others similarly situated, Plaintiff, v. SONY COMPUTER ENTERTAINMENT AMERICA, LLC, Defendant.

No. C-14-3530 EMC

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

December 16, 2014

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS

(Docket No. 30)

I. INTRODUCTION

Plaintiff Douglas Ladore filed this putative class action against Defendant Sony Computer Entertainment America LLC (hereafter Sony) regarding allegedly fraudulent or misleading representations Sony made about its video game Killzone: Shadow Fall (Killzone). Specifically, Ladore claims that Sony 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.¹

Sony moves to dismiss the complaint on a number of grounds, including that its representations about Killzone's multiplayer graphics were not false, that Plaintiff failed to adequately plead reliance on any alleged misrepresentation, that the Killzone video game is not a"good" so as to come under the auspices of the California Consumer Legal Remedies Act (CLRA), and that the economic loss rule bars Ladore's tort claim for negligent misrepresentation.

The substantial majority of Sony's arguments are premised on an unduly narrow reading of Plaintiff's complaint, and suffer an additional fatal flaw - to grant Sony's motion, the Court would need to draw all reasonable inferences in favor of Sony. Indeed, only one of Sony's arguments has merit: Plaintiff's negligent misrepresentation claim, as currently pleaded, is barred by the economic loss rule. Thus, Sony's motion is denied in significant part.

II. BACKGROUND

A. Factual Background

Defendant Sony Computer Entertainment America LLC is the American corporate entity responsible for the sale and marketing of the Sony PlayStation, a popular video game console. Complaint at ¶¶ 12-13. Sony and Microsoft, the manufacturer of the rival Xbox video game console, "have battled for video gamers' attention for more than a decade." Id. at ¶ 17.

On November 15, 2013, Sony launched the latest version of the PlayStation, the PS4. Id. at ¶ 13. The most recent version of the Xbox, the Xbox One, debuted a few days later. Id. at ¶ 14. Ladore alleges that "the focus of the 'console battle'" between Sony and Microsoft "rested squarely on the consoles' respective performance. Amongst gamers and video game critics, a metric known in the industry as 'resolution' is a leading indicator of video game and console performance." Id at ¶ 18.

"'Resolution' is a measure of a digital image's clarity." Id. at ¶ 19. Typically, the more pixels (point of color) that make up a digital image, the more clear that image will appear to a viewer. See id. According to Ladore, image "resolution" specifically "refers to the number of lines of pixels in the vertical direction [multiplied] by the number of lines of pixels in the horizontal direction (e.g., 1,920 by 1,080)." Id. A video monitor (such as a television) that displays 1,920 lines of pixels in the vertical direction, and 1,080 lines of pixels in the horizontal direction is said to display video in "1080p" format. See id. at ¶ 20. A video monitor that displays only 1,280 lines of pixels in the vertical direction, and 720 lines of pixels in the horizontal direction, is said to displayvideo in "720p" format. See id. at ¶ 22. According to Ladore, an image displayed in 1080p will offer "double the graphical detail" as one displayed in 720p. Id.

For the purpose of this motion, it is important to note than an image that is originally created (or rendered) at a lower resolution, say 720p, can ultimately be displayed at a higher resolution, say 1080p. Id. at ¶ 23. This can be done by the process of interpolation, which is 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." Id. at ¶ 23 n. 8. Essentially, the "interpolation" process allows an image originally created with a smaller number of pixels (e.g., one million pixels in a 720p image) to be displayed with more pixels (e.g., two million pixels in a 1080p image) by using "algorithms to guess what the [newly created] pixels should look like by analyzing nearby pixels." Id. However, at least some believe that using interpolation to transform a lower resolution image into a higher resolution image is a "horrible kludge that results in soft, slightly blurry images."² Id. at ¶ 23.

A Sony subsidiary, Guerrilla Games, developed a video game title called "Killzone: Shadow Fall" that was released for sale along with the debut of the PS4. Id. at ¶ 13. "All marketing and advertisements for the Killzone video game were developed by Sony and emanated from Sony's California offices." Id. at ¶ 16. According to Ladore, that marketing focused heavily on Killzone's claimed ability to render the game in multiplayer mode at "native 1080p" resolution. See id. at ¶ 28. This was an important representation, for both Sony and video gamers, because the PS4 was supposed to be "more powerful in graphical terms" than the competing Xbox One, id. at ¶¶ 22-23, and Sony wanted Killzone to be a "showcase for the PS4's technical capabilities."³ Id. at ¶ 15. Putsimply, Ladore alleges that "Sony chose to feature Killzone when it launched the PlayStation 4, ostensibly because of its graphical fidelity." Id. at ¶ 25.

Ladore claims that he read numerous internet accounts - many of which were published by Sony or which cited statements (allegedly) made by Sony employees - that represented that Killzone's multiplayer mode would render graphics in "native 1080p and 60 fps [i.e., frames per second]." Id. at ¶ 28. 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." Id. at ¶ 29 (internal modifications omitted). Another challenged representation was made a few weeks before the launch of Killzone and the PS4, when Sony released a "downloadable gameplay demonstration" of Killzone. Id. at ¶ 31. Describing that demonstration version of Killzone, 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]." Id.

According to Ladore, he relied on internet reports describing Killzone's multiplayer mode as rendering graphics in "native 1080p" and thus "chose to purchase the Killzone video game using Best Buy's 'free store pickup' service." Id. at ¶ 51. "Before completing his purchase, and while still at his local Best Buy retail store, Plaintiff examined the Killzone retail packaging and confirmed that Killzone would deliver an unrestricted 1080p graphics resolution." Id. at ¶ 52. Specifically, Ladore relied on the following graphical representation on the back of the box containing the Killzone game disc:

Image materials not available for display

Id. at ¶ 34.

Convinced Killzone would "deliver 1080p graphics resolution," Ladore purchased the game and opened the package, "thus rendering the game un-returnable." Id. at ¶ 54. Upon playing the game, however, Ladore "realized that the game's multiplayer graphics were not the 1080p graphics that Sony had advertised." Id. "Instead, Plaintiff noticed that Killzone's multiplayer graphics were blurry and did not appear to be rendering at a native 1080p resolution." Id.

Ladore was not the only person who found Killzone's multiplayer graphics "blurry" or otherwise disappointing. Id. at ¶ 41. According to Ladore, even video game critics noticed that Killzone's multiplayer mode "has an odd motion blur effect that makes the game look overly blurry." Id. Eventually, a website called "Eurogamer.net" published an article that purported to explain why Killzone's multiplayer mode was so blurry. Id. at ¶ 42. Eurogamer claimed that Killzone's multiplayer mode was not rendered in native 1080p, but instead used "interpolation" to produce multiplayer graphics that appeared to have 1080p resolution. Id. Specifically, Eurogamer reported that in multiplayer mode, "Guerrilla Games has opted for a 960x1080 (i.e., exactly half of 1080p's resolution of 1,920 by 1080) framebuffer . . . . Killzone uses a horizontal interlace, with every other column of pixels generated using a temporal upscale - in effect, information from previously rendered frames is used to plug the gaps." Id. (internal modifications omitted).

A few days after Eurogamer published its report that Killzone multiplayer actually used interpolation to achieve 1080p output, a "producer for Killzone" (and thus presumably a Sony employee) authored a post on "killzone.com" explaining how the game's multiplayer graphics were created. Id. at ¶ 43. The producer first explained that the term "[n]ative is often used to indicate images that are not scaled," and noted that Killzone' single player mode was rendered in un-scaled native 1080p. Id. But the producer conceded that Killzone's multiplayer mode uses a "technique called 'temporal reprojection' [(i.e., interpolation)] which combines pixels and motion vectors from multiple lower-resolution frames to reconstruct a full 1080p image. If native means that every part of the pipeline is 1080p, then this technique is not native" Id. (emphases added). The producer then explained that "[w]e recognize the [video game] 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 languagein the future" Id. The producer concluded by noting that Killzone's use of interpolation "gave substantially similar results" to rendering in full/native...