Sony and Microsoft say they’re not obligated to pass U.S. tariff refunds to consumers, echoing Nintendo

Back in July, Sony executives told investors that the company expected to receive $508 million in refunds from the U.S. government, after tariffs that the PlayStation-maker paid were ruled mostly in 2025 were found to be illegal.

“Most” of the refund would by recouped by Sony’s gaming division, its chief financial officer said.

This week, Sony’s lawyers are arguing that the company is not legally obligated to pass those proceeds on to consumers who paid for recently price-hiked PlayStation consoles. That’s in the face of a lawsuit from gamers calling on them to do exactly that.

“Paying fair market price for voluntarily purchased consumer goods is not a legally cognizable injury in fact,” the lawyers wrote in a legal motion filed on Monday, as they asked a judge in California’s Northern District to dismiss a potential class action lawsuit over the tariff refunds.

Microsoft made a similar argument two weeks ahead of Sony’s lawyers, in a similar lawsuit brought by a gamer in federal court in Washington State.

As Microsoft’s legal team put it on August 21, in their request for a dismissal of that lawsuit: “There is nothing unjust about Plaintiff purchasing an Xbox at an advertised price and getting exactly what he paid for—regardless of whatever theory he devised months later about Microsoft’s cost structure.”

Both legal fights are set to go on for some time.

U.S. tariffs impacting a wide range of imported goods, including game consoles, had kicked off in early 2025.

In May 2025, Microsoft raised the price of its Xbox consoles, citing “market conditions and the rising cost of development.” They raised them again that September.

In August of that year, Sony raised the price of PlayStation 5 consoles, citing “a challenging economic environment.” Sony later told investors that its tariff fees for the fall quarter were nearly $200 million.

in February of this year, the U.S. Supreme Court ruled the 2025 tariffs illegal, prompting impacted companies to begin to request refunds.

In turn, consumers began suing the likes of Sony and Microsoft to get what they said was their share. The gamers in the Microsoft and Sony lawsuits argue that the 2025 price hikes of PlayStation and Xbox consoles, which added $50 or more to their sticker price, were due to illegal tariffs and should now be returned to consumers.

The Sony suit started in May, when a group of gamers sued in federal court in California, saying Sony Interactive Entertainment (PlayStation) would be unjustly enriching itself if it did not pass tariff refunds to its PS5 buyers.

“Sony is poised to be paid twice for the same unlawful tariff burden: once by its customers (through elevated prices) and once by the U.S. government (through tariff refunds),” the gamers’ lawyers wrote at the time.

They called for Sony to partially reimburse anyone who bought a PlayStation in the U.S. since August 1, 2025.

The Microsoft suit, filed by gamer Trevor Hastings against the Xbox giant in July, made similar claims.

In late July, Nintendo’s lawyers, facing a similar suit accusing them of double-dipping on tariffs and refunds, replied with arguments that previewed Microsoft’s and Sony’s: “Nintendo or one of its retailers set a price for each product, and consumers decided whether that price was worth paying,” they wrote.

Sony has buttressed that Nintendo-style argument this week by saying that the gamers have failed to prove that tariffs were the reason for its August 2025 PS5 price hike. They call thatclaim “speculative and illogical.”

Other factors, including “inflation, currency fluctuations, component costs, logistics, competitive dynamics, or demand,” could have played a role. (No, the Sony lawyers do not break down the costs and factors that officially triggered the price increases).

Microsoft has also argued that there’s no proof in these lawsuits that tariffs drove all or some of the price increase, as it seeks to dismiss the tariff refund suit it’s facing:

“Plaintiff provides no specific allegations that would establish any pricing differential attributable to tariffs or suggest any possibility that Microsoft applied then or could recreate now any dollar-for-dollar calculation of tariff-related pricing—any more than it could any other market factor that affects pricing.”

To further skewer the gamer side’s argument in its case, Sony’s lawyers have pointed to what might be a surprising defense: yet another PlayStation 5 price hike from this past spring, after the tariffs were ruled illegal.

“If the original price increase were attributable to tariffs, SIE [Sony Interactive Entertainment, aka PlayStation] would have had no reason to raise prices again after the Supreme Court invalidated the IEEPA tariffs.”

…

“If tariffs were the cause of the price increases, one would expect SIE to lower prices once the tariffs were eliminated—not raise them again. Instead, the timeline confirms that the pricing of PlayStation consoles includes a diverse and dynamic set of input costs.”

Judges have not yet ruled on the arguments made by Sony, Microsoft or Nintendo.

Last week, Panic, the company behind the small, yellow Playdate handheld said it would be passing its tariff refunds on to consumers. It is the only gaming hardware maker to have made such a pledge.

Wagner James Au, who from 2003-2006 was paid by San Francisco-based tech company Linden Lab to be a full-time journalist embedded in their virtual world Second Life, is returning to the company. This time, he’ll be an editorial advisor and business development specialist, he tells Game File.

The new role will involve trying to share the stories of people inhabiting Second Life’s ongoing online world with reporters and by extension the public. Au plans to continue to also chronicle some of that through his long-running blog New World Notes.

I’ve known Au since the mid-2000s and featured him in a 2007 article for the Columbia Journalism Review about reporters like him opening up virtual news outlets within Second Life. As I wrote at the time:

On April 22, 2003, writing as Hamlet Linden for the New World Notes blog on Second Life’s Web site, Au introduced himself. “For the next few months, Linden Lab has invited me to set aside my journalist cap, and instead, don the digital beanie of their in-house virtual correspondent.” He wasn’t paid to keep it positive. He wrote about builders and eccentrics, but then in August of that year, he reported on a tax revolt against Linden Lab (a complaint about the fees it charges users who build stuff) led by a resident whose avatar was a big cat.

Second Life has always been less of a video game and more of a virtual world where people can live, hang out, make art, sell virtual items and flirt. Back in 2007, Au described touring it as “sort of like underwater lucid dreaming.”

For the past two decades, Au has maintained New World Notes as an independent publication. But he said he’s been drawn back to Second Life and Linden Lab as a place to directly work. The virtual world has around 650,000 monthly active users, he said, “which is actually about what it was during the hype wave.”

Au says he’s still finding rich stories in Second Life, the kind that keep him interested 20 years into the beat: “Over the last few months for instance, I wrote about an SL creator in Venezuela whose apartment was destroyed by the earthquakes, so the global SL community rallied to get him back on his feet,” he told me. “Then there’s the woman from a Middle Eastern country who explored her lesbian sexuality in SL, then earned enough from her virtual jewelry to escape her abusive family situation and country.”

Au wants to beckon more reporters to give Second Life another look. He argues that it is often ahead of internet trends, noting, for example, an early backlash in the community against AI-made art. Now the platform is drawing curiosity from more of the user-generated content community who’ve grown up with the likes of Roblox, according to Au.

“Second Life was too early during its hype wave in 2005-2010, but it now feels right for a new wave of interest,” he told me.