Gaming Steve

January 8, 2008

Xbox Live Class Action Lawsuit Worth Pennies, Not Millions

Sue Microsoft: Collect $5 million dollars

A few days ago three angry Texas gamers filed a class action lawsuit against Microsoft for holiday Xbox Live outages to the tune of $5 million US Dollars. I was going over the case, examining their potential damages, and determined that this lawsuit makes absolutely no sense to me.

Okay, so maybe Microsoft had unexpected downtime, but demanding 365/24/7 service is expecting God-like powers from Microsoft. If it were quantified into actual lost funds, Microsoft’s announced free game offer is very generous.

When you join Xbox Live, you agree to a contractual Terms of Use that you must agree to in order to join. Those terms include downtimes as necessary and paragraph 16, where you accept limited liability and no warranty. Here is that portion of the document:

16. WE MAKE NO WARRANTY We provide the Service "as-is," "with all faults" and "as available." The Microsoft Parties give no express warranties, guarantees or conditions. You may have additional consumer rights under your local laws that this contract cannot change. To the extent permitted by law, we exclude the implied warranties of merchantability, fitness for a particular purpose, workmanlike effort and non-infringement.

Xbox Live users are subject to downtimes, regardless of reasons or causes. Basically, if Microsoft provides the service that you pay for, you have no other say in the matter.

And even if Microsoft is liable for the downtime, the actual refund amount may shock you.

If you are a Silver member, or one on a free trial offer, Microsoft owes you nothing as the service provided is cost you nothing. If you are a Gold member, you can divide up your yearly fee to a daily fee. $50 US Dollars for an annual fee is approximately 13.7 cents a day. The downtime was about 6 days, which ends up being 82 cents.

So as compensation for the downtime Microsoft is offering a free XBLA game to Xbox Live users. This offer will most likely be a game worth $5 USD. Not only do they owe Live users nothing, but this offer is generous! If you accept the game, you cannot participate in the class action and lose your claim of your 82 cents. I advise you to take the game offer.

Lawyers have a bad reputation for frivolous lawsuits. This class action suit is just one of the many reasons for that negative stereotype. It is obvious the lawyers taking on this case have not done their homework and are showing their inexperience in an embarrassingly public way. After all, what do you call a lawyer who graduates last in his class? You call him “attorney.”

Posted by Robert Gauss at 1:15 PM | Comments (17) | Posted to Business | Xbox |  Add this story to  Stumble It!  Submit this story to Digg!

I don't know $0.82 sounds like a lot of money.

Posted by ilikesanta at January 8, 2008 3:01 PM

I am sorry but the problems are still occuring. Takes forever to look at your friends info. Takes a few minutes to send one message at times. Getting kicked from games because the constant downage of live. You think it is fixed. You are dead wrong. I understand that it has to be down from time to time. But this is the worst service to date. Everyone is trying to make their online gaming like Xbox Live. Playstation's is far from it. Wii can't compete to it. But if this continues guarntee I will be on playstation's crappy service just because it is free.

Posted by Doug at January 8, 2008 4:35 PM

Thank you texas! Once again your stupidity has proven valuable for the rest of us!


Posted by ShoeDeath at January 8, 2008 4:46 PM

Well said, Robb! I've had almost this exact discussion with friends regarding satellite and cable outages. These frivilous lawsuits end up costing all of us more than they gain anyone except the lawyers. Customers hear "millions" and go nuts without taking the time to calculate their actual personal small change percentage if the suit goes anywhere. The businesses (or the insurance companies) will recoup their losses by passing the cost back to the consumers. I'm no fan of Microsoft but at least give them adequate time to fix the larger problem correctly instead of pushing for quick and kludgy stopgaps.

Posted by Karen at January 8, 2008 5:28 PM

Only two things come from Texas...

Posted by Paroxysm at January 8, 2008 5:28 PM

Amazing. Here's an idea: crawl out of Mom's basement and enjoy the REAL world! Maybe talk to a girl, hang out in PERSON with people. 13 cents a day you pay for the service! 13 CENTS a day!!!! How stupid and pathetic could these guys lives be to file this lawsuit. Talk about not having a life WOW!

Posted by amazedgamer at January 8, 2008 5:46 PM

Although you're correct in your posting, there is a loophole in the contract that allows for people to recover damages from Microsoft due to Service provided.

I'm no legal expert, nor do I pretend to be, but I would think that this topic would hold up in court. The following is the article in the Terms of Service, in question:

You can recover from the Microsoft Parties only direct damages up to an amount equal to your Service fee for one month. You cannot recover any other damages, including consequential, lost profits, special, indirect or incidental damages.
This limitation applies to:
-any matter related to the Service,
-any matter related to content (including code) on third party Internet sites, third party programs or third party conduct,
-any matter related to viruses or other disabling features that affect your access to or use of the Service,
-any matter related to incompatibility between the Service and other services, software and hardware,
-any matter related to delays or failures you may have in initiating, conducting or completing any transmissions or transactions in connection with the Service in an accurate or timely manner, and
-claims for breach of contract, breach of warranty, guarantee or condition, strict liability, negligence, or other tort to the extent permitted by applicable law.
It also applies even if:
-this remedy does not fully compensate you for any losses, or fails of its essential purpose; or
-Microsoft knew or should have known about the possibility of damages.
Some states do not allow the exclusion or limitation of incidental or consequential damages, so the above limitation or exclusion may not apply to you. They also may not apply to you because your province or country may not allow the exclusion or limitation of incidental, consequential or other damages."

Posted by FormidableOne at January 8, 2008 7:19 PM

im from Texas... aaaaaargh! WHAT WERE THEY THINKING! LMAO @ those three(3)<--- so they can read it too, idiots. This is just another example of someone trying to get over. I hope MS finds out who they are and bans their arses for good.

Posted by the1ej at January 8, 2008 8:51 PM

Actually, Xbox Live hasn't been working for me since 24DEC2007. I think that's ridiculous! If this service was free I would be fine with it. Unfortunately it's not free. Neither is the crappy game, it comes at a huge price for any fan of gaming on Live. If this happened in June I wouldn't care but the day before Christmas and STILL going on!?!?
btw I say crappy game because chances are it's a game I already own or better yet a game nobody wants to buy.
Yie Ar Kung Fu?

Posted by James T at January 8, 2008 9:28 PM

Anyone see the CAD comic about this? (contains language)

Posted by Gungnir at January 8, 2008 9:52 PM

Lol...When Live is down I just kick it with real people, and hope its up later. No need to sue...if you have a life that is..LOL

Posted by Kage314 at January 9, 2008 1:30 AM

Have people tried calling Microsoft to get a partial refund on their monthly bill? I would think that if you call them up as an angry customer and threaten to cancel your Gold subscription, they might give you a $5 or $10 credit.

Posted by doctor_kaz at January 9, 2008 11:16 AM

But it's America we're talking about here. Think of the vast emotional damage these poor gamers suffered because they couldn't log in 24/7!

And emotional damage can be repaired in only one way - with money.

Posted by Billy at January 9, 2008 1:28 PM

In replay to formidibleone, that clause will only allow for a refund for up to the amount it would cost for 1 month of access... they wont get their $50 back

Posted by ryan at January 9, 2008 3:00 PM

new idea and its a great one... we will call it the boy who called wolf act... if you are stupid enough to file a lawsuit as frivulous as this one you can never try to sue someone again. slip in a store, too bad; mcdonalds coffe too hot, tough ish; get hit in a car accident, that will teach them.

Posted by dt3 at January 9, 2008 3:49 PM

My life has been ruined!!!! I can't get onto xbox live! I can think of only two solutions...........kill myself........or sue xbox so i can pay for counseling from this life ruining experience!!!!!!

Get a life people its a freaking video game! Your complaining about 50$ a year? Your lucky it works for one week out of the year for that cheap price. It may be down a few hours at a time how about you wipe the food off your face get out of your chair and go out and do something productive!

Posted by R at January 12, 2008 2:05 AM

What if someone hacked into microsoft/xbox Live and got your credit card number and personal information, changed your gamertag to something else and started charging on your credit card? And they bragged about doing it when you caught them. Is that worth a law suit?

Posted by SR at July 31, 2008 11:55 PM
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