Free Market + Government Intervention & Punishment + Taxpayers Dollers = LOLFAILWHALE ECONOMY
Free Market + Government Suggestion & Aid + Taxpayer Dollers = Working Economy
A "hey, we're probably going to have to sue you if you do this" seems equally like "suggestion" to me. This is part of how the contours of what's permissible and what's not get drawn, and companies in the future will look at this and say "Google and Yahoo went this far, but got warned off. To what extent is our deal like that one?"
Settle now. Pay the plaintiff's attorneys, pay the heads of the class action, and make the pedals available for, say, another year.
Almost by definition, it can't be much more expensive than fighting the lawsuit out, and it would make people feel a lot better about buying from the Rock Band franchise in the future.
Those of us who didn't have consoles as kids, and are enjoying these titles and genres for the first time!
A fellow bar patron put it best:
"BLUE TEAM WINS"
Politics: A strife of interests masquerading as a contest of principles. The conduct of public affairs for private advantage. -- Ambrose Bierce