Action Replay maker sues Microsoft for Xbox 360 'predatory technological barriers'

Microsoft's Xbox 360 is no longer compatible with the first -- and only -- third party memory card, Datel's Max Memory, after the distribution of a Dashboard software update. In response, Datel has filed an antitrust lawsuit against Microsoft.

"Microsoft has taken steps to render inoperable the competing Datel memory card for no visible purpose other than to have that market entirely to themselves," said Marty Glick, the senior attorney representing Datel. "They accomplished their recent update by making a system change that will not recognize or allow operation of a memory card with greater capacity than their own. We believe that with the power Microsoft enjoys in the market for Xbox accessories this conduct is unlawful."

Datel has made a name for itself by selling "over the counter" device hacks for most of the major video game consoles of the last 20 years, most notably the popular Action Replay system which lets users manipulate game software to enable cheats.

Datel has landed in court over its products many times over the years, both for the Action Replay brand, and for the Game Shark brand which was originally based on Datel's Action Replay licenses. In 1992 Datel went to court with Sega, and in 1999 with Sony. This year, Sony sued Datel again for the PSP Lite Blue battery which enabled "service mode" in the PlayStation Portable.

Few of Datel's products have ever been officially endorsed by gaming companies.

Datel alleges that Microsoft's recent dashboard update was intended to "prevent consumers from choosing a Datel product that offers far better value for the price," and also to "foreclose competition from Datel in the sale of other aftermarket Xbox accessories and in add-ons, including gamepad controllers, through the implementation of predatory technological barriers. These technological barriers do not constitute improvements of the product in any respect, but are rather arbitrary contrivances intended to perpetuate Microsoft's market power."