RaychelSnr's Blog
Madden Class-Action full of shoddy logic, misrepresented facts 
Posted on December 23, 2010 at 01:27 PM.
This is going to be one of my most hated blog posts I have yet to write -- but I have always strived to tell the truth as I see it in this blog space. With that in mind, I know there are A LOT of people on OS that hate EA for entering into the exclusive license agreement the NFL offered gaming companies via a bid process and are looking for any reason to tear that agreement down. And while the common cry among Madden haters is to try to tear down anyone defending EA as an EA homer or shill, I'd think this blog's history would depose a lot of that venom.
Simply put, the class-action suit which came to light yesterday is just a poor attempt at trying to villanize EA for entering into the exclusive agreement via anti-trust law. It will fail because the case is simply built fraudulently or incompetently -- neither of which will win you a court case.
I spent some time and read the suit in it's raw legalese form in order to discern what might it's chances be. I'm no lawyer, but I did contact a friend who actually does anti-trust work in the law field and I'm adding in his expertise throughout this article -- not that you'd need anyone with more than a law degree from a cracker jack box to win this case.
The key and core claim of the suit is this
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What the suit doesn't mention is that in the business of sports games, prices are dropped regularly before the new games are released. In this case, Madden 05 sold at $49.95 BEFORE it was dropped to $29.95 in response to NFL 2K5's very aggressive pricing. Then the next year's Madden again sold for what was a standard market price of $49.95.
If the logic were to be followed in this claim, 2K Sports and Take Two are also guilty of price gouging every year when they raise the price of a new game to the full price of $59.99 after the previous title was dropped in price over time. But it gets better, if the claim were true that EA is price gouging by the tune of 70%, all new AAA titles should sell at an average of $20. That has never been the case in the history of gaming and it most likely never will be.
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Since we've already established the 'harm' to the consumer is actually standard and accepted practice in the gaming industry and that the key claim is at best derived after an incompetent study of the facts and is at worst a fraudulent attempt to try to get a quick buck from EA and clueless plantiffs.
In a vacuum this claim will not hold up either. The market for a football video game is not all to itself. You can easily make the case that products from other sports and genres effect the sales of Madden and other footall titles, so to prove anti-trust uncompetitive action you'd have to also prove that EA is harming the consumer across the whole gaming landscape with their NFL license agreement. There is a reason most anti-trust cases fail, and what seems to be a open and shut case to the uninformed mind is actually a very complicated thing to prove.
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Wait, didn't you just claim in your core claim that EA rose the price 70% after charging $29.95 for Madden against NFL 2K5? So which is it?
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Now the case is trying to say the exclusive agreement was wrong from a legal standpoint. It is only wrong from an anti-trust standpoint if the relevant market for the game is controlled by the company in question who then harms the consumer in some way. To prove the exclusive agreement is wrong requires a whole other leg of legal action which will be almost impossible to prove, despite what some might say.
The other thing the case refuses to explain away is how there have been literally dozens of football titles over the years that have competed with Madden which were better critically and even outsold EA's game. None of these titles were consistent enough to topple Madden, but EA didn't enter into an exclusive agreement before 2005 either. The reasoning behind entering into the agreement was that it was good for business for EA, and only a fool would argue it has been bad for business.
Furthermore, to prove EA is at fault for the exclusive agreement is legally unfounded. Peter Moore has claimed that EA was asked to submit a bid to the NFL for the license along with other companies. EA has come up with the top bid twice. It has been the NFL, not EA, who has determined the license would be an exclusive arrangement with video game makers. To prove otherwise would probably require someone steal Roger Goddels hard drive and search through his e-mails and see if he's gotten any from Peter Moore and/or John Riccitiello discussing nefarious plans to manipulate the bids.
Otherwise the license was done in standard business practice and the top bid won. That's how A LOT of licenses are given out in the video game world (and business is divvied out in other realms). For the most part, this is a legal and acceptable way to conduct business.
So not only was the base of the case (consumer being harmed from price gouging) blatantly false, but the claim of a specific market for football games is false and the claim that the agreement between EA and the NFL is anticompetitive in the context of the prior two claims also almost certainly false.
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No one is stopping other companies from making other football games. In the interactive NFL football market, then yes there would be restraint. But in the interactive Avatar, Harry Potter, Batman, and Spiderman markets there is restraint too. Companies shop their brands out to video game makers via a bid process and the top bidder gets the license. That's not unfair, it's how business is done in Video Games AND in business in America every single day.
This case is built on a fraudulent conclusion from a misrepresented set of facts. The logic used is at best full of holes and at worst not even logical at all. The impact this will have on EA, if anything, will be to strengthen any future bids for an exclusive NFL license should the NFL decide to continue that arrangement in the video games landscape.
Those are the facts, and while some will run around with emotional yells of blasphemy, you cannot change the way the law works without a carefully worded Act of Congress. Anti-trust cases are almost impossible to prove and this one is doomed from the get go.
While I have found plenty of reasons to criticize EA and the Madden series (both probably the main targets of this blog if I have any) this case and the people supporting it represent the worst form of the disease running through America of trying to create facts to fit your own opinions. That's not how it works, you have to take the facts and then form opinions based off of them.
If you are mad that you can't stop spending money on Madden every year, just quit buying the game. You are not being forced to buy an NFL video game and you are not required to give the next version a chance. You willingly enter into an agreement with the software publisher with a purchase which says, "I approve of your direction and how you conduct business with my purchase of your product." Anyone wanting exclusivity to stop simply needs to quit buying Madden, NCAA and any other products they don't like and want changes to come to.
As far as this case goes, it won't get much farther in the court system and any competent anti-trust defense lawyer will easily squash it. As far as the future of football gaming goes, that's up to the NFL. If they determine they want to keep one company as the holder of the video games license -- then EA will almost certainly win the bid to keep the license. This case won't change the NFL's thinking on the matter and, if anything, will strengthen their defense should any future problems arise since this suit is so poorly put together.
# 2
Hova57 @ Dec 23
good article chris . it sums up what I've heard alot say if you don't like how they do business then don't buy it. I thought they may have a case with exclustivity of NFL and NCAA but I guess not because its looked at at the entire industry and not just a genre
# 4
ewig @ Dec 23
I'm surprised this was even allowed to go forward. 2K's pricing stunt with NFL 2K5 was an anomaly and Madden's price that year was adjusted accordingly in an effort to compete. Madden's pricing has always been in line with other "triple A" or frontline titles on the respective platforms and is within industry standards for pricing.
# 5
khaliib @ Dec 23
I know most folks are focusing on the pricing issue as to how valid the argument/claim may be, but most often the detail(s)of the claim are rarely released to the media. It's usually just a generalization of the entire claim so that the media could do a write-up so the general public could understand.
Many on OS may know of attorney's that practice (some Antitrust Law)who would give a different summation based off of a generalized claim in the media.
There must have been some validity to the argument for a Judge to allow the claim to be brought before the court.
One attorney said that arguments before a Jury changes the game completely because unlike a Judge who would look at the letter of the Law, Juror's decide off of "their" understanding and their emotions attached to that understanding.
Meaning, those that practice Law will/can look at this claim in black and white, but a Jury will decide in the grey. Which favors the claimant.
The foundation of their claim is about how EA's Exclusive deal violated "Antitrust Laws".
Because we (gamers)don't practice law, we can only assume to the best of our understanding based off of the initial statement released to the media.
Based off of what has been released, could there be a claim?
Well seeing that this is about a possible violation of Antitrust Laws, we must know what is the purpose of Antitrust Laws.
This is from the FTC (Federal Trade Commission)
http://www.ftc.gov/bc/antitrust/index.shtm
"Free and open markets are the foundation of a vibrant economy. Aggressive competition among sellers in an open marketplace gives consumers — both individuals and businesses — the benefits of lower prices, higher quality products and services, more choices, and greater innovation. The FTC's competition mission is to enforce the rules of the competitive marketplace — the antitrust laws. These laws promote vigorous competition and protect consumers from anticompetitive mergers and business practices. The FTC's Bureau of Competition, working in tandem with the Bureau of Economics, enforces the antitrust laws for the benefit of consumers."
So, to say that this claim is not valid, would be an incorrect assumption based off of the "FTC's" defining purpose of Antitrust Laws.
Again, we will have to wait and see what specific Antitrust Laws are claimed to be broken, to know if they can "Win" their case.
Submitting it as an Class Action is not good for EA.
Having several thousands of claimants on a claim could push a Jury to believe that EA must have done something illigal.
The worst thing EA was that a Judge allowed such a claim to be argued.
I wouldn't be suprised if a settlement is reached to prevent the negative media that can come out of this.
Also, this could cause John Madden to pull the usage of his name, if this things goes through to prevent any negative attachments to his "Brand".
Many on OS may know of attorney's that practice (some Antitrust Law)who would give a different summation based off of a generalized claim in the media.
There must have been some validity to the argument for a Judge to allow the claim to be brought before the court.
One attorney said that arguments before a Jury changes the game completely because unlike a Judge who would look at the letter of the Law, Juror's decide off of "their" understanding and their emotions attached to that understanding.
Meaning, those that practice Law will/can look at this claim in black and white, but a Jury will decide in the grey. Which favors the claimant.
The foundation of their claim is about how EA's Exclusive deal violated "Antitrust Laws".
Because we (gamers)don't practice law, we can only assume to the best of our understanding based off of the initial statement released to the media.
Based off of what has been released, could there be a claim?
Well seeing that this is about a possible violation of Antitrust Laws, we must know what is the purpose of Antitrust Laws.
This is from the FTC (Federal Trade Commission)
http://www.ftc.gov/bc/antitrust/index.shtm
"Free and open markets are the foundation of a vibrant economy. Aggressive competition among sellers in an open marketplace gives consumers — both individuals and businesses — the benefits of lower prices, higher quality products and services, more choices, and greater innovation. The FTC's competition mission is to enforce the rules of the competitive marketplace — the antitrust laws. These laws promote vigorous competition and protect consumers from anticompetitive mergers and business practices. The FTC's Bureau of Competition, working in tandem with the Bureau of Economics, enforces the antitrust laws for the benefit of consumers."
So, to say that this claim is not valid, would be an incorrect assumption based off of the "FTC's" defining purpose of Antitrust Laws.
Again, we will have to wait and see what specific Antitrust Laws are claimed to be broken, to know if they can "Win" their case.
Submitting it as an Class Action is not good for EA.
Having several thousands of claimants on a claim could push a Jury to believe that EA must have done something illigal.
The worst thing EA was that a Judge allowed such a claim to be argued.
I wouldn't be suprised if a settlement is reached to prevent the negative media that can come out of this.
Also, this could cause John Madden to pull the usage of his name, if this things goes through to prevent any negative attachments to his "Brand".
# 6
allstar3970 @ Dec 23
Ok, so any company should be able to make a Batman or Bond game to avoid antitrust legislation right? The lawsuit still doesnt make sense, the NFL can sell their license to whoever they see fit. Would I love more choices? Of course, but lets not assume they have a legal leg to stand on just b/c emotionally we agree with them.
# 7
UMhester04 @ Dec 23
Chris, very well put together blog. You have changed my viewpoints on the situation mostly because I had no idea how to interprit the whole thing. I do not wish EA to have to pay back consumers, that is just stupid. However I do wish that somehow from this case, the exclusive liscense does come to a screeching hault.
# 8
wallofhate @ Dec 23
WhenI read the article I too thought the numbers where misleading. Its like the spun it just to fit to the legal jargon to make a case (as weak as it is). I dont knock EA I mean the are a business! I think its unfortunate for people who enjoy sports gaming and the level of extra detail that games designers take when there is healthy competition. People get lost in the fact that they are a business and they arent are friends and the end of the day its about revenue. That being said I wish people understood the power of the consumer and take a stand and say its not good enough and were are not buying and trust me your will see radical changes
# 9
RaychelSnr @ Dec 23
@Khalib -- The reason why people are focusing in the pricing issue is because that is the reasoning why an anti-trust violation occured according to the text of the suit. To say an argument has validity to it because a judge let it be heard is misinformed of our legal system at best and an attempt to be purposefully deceptive at worst. Judges ok cases to be heard all the time which have no chance of actually getting prosecuted.
Your quote of the FTC is a good one and is the spirit of the anti-trust law, but you fail to take into account how one would go about proving such a violation has occured of anti-trust laws. In this instance, I laid out why such a violation cannot be proven based upon the claims within the original case. Sure there will be further and deeper arguments attempted by the plantiffs, but there is no way they will get very far. Anti-trust cases are hard to see through for a reason -- it's hard to prove consumers have been wronged. In this case, it's going to be almost impossible given the claims are based upon shoddy logic and misrepresented facts. That's why this case won't win.
If you read the suit, you can see EXACTLY which grievances the plantiffs claim were broken, and they center on price gouging and no competition. However, those laws do not apply here for a variety of reasons, the biggest of which is that EA has conducted business with the NFL on the NFL's terms. So to sue EA over having the only football game is both targeting the wrong entity and has no legs to stand on unless you could materially prove that EA and the NFL worked in collusion to manipulate the bid process so that EA would win. Unless these lawyers have an amazing smoking gun we don't know about, they can't prove such a thing occurred and thus no anti-trust laws were broken. By law, business was conducted and EA won the rights to the NFL via a fair bidding process.
Quit hoping that someone is going to do your work as a consumer for you and either don't buy Madden and make a statement with your wallet OR keep buying Madden. That's the choice you and others have a consumer and it's a darned powerful one. The worst mistake you can make is thinking you are only one person and if enough people are really that upset about Madden then something could be done if you all decide to not buy the game. Otherwise, you are just part of a vocal minority and that's simply that.
Your quote of the FTC is a good one and is the spirit of the anti-trust law, but you fail to take into account how one would go about proving such a violation has occured of anti-trust laws. In this instance, I laid out why such a violation cannot be proven based upon the claims within the original case. Sure there will be further and deeper arguments attempted by the plantiffs, but there is no way they will get very far. Anti-trust cases are hard to see through for a reason -- it's hard to prove consumers have been wronged. In this case, it's going to be almost impossible given the claims are based upon shoddy logic and misrepresented facts. That's why this case won't win.
If you read the suit, you can see EXACTLY which grievances the plantiffs claim were broken, and they center on price gouging and no competition. However, those laws do not apply here for a variety of reasons, the biggest of which is that EA has conducted business with the NFL on the NFL's terms. So to sue EA over having the only football game is both targeting the wrong entity and has no legs to stand on unless you could materially prove that EA and the NFL worked in collusion to manipulate the bid process so that EA would win. Unless these lawyers have an amazing smoking gun we don't know about, they can't prove such a thing occurred and thus no anti-trust laws were broken. By law, business was conducted and EA won the rights to the NFL via a fair bidding process.
Quit hoping that someone is going to do your work as a consumer for you and either don't buy Madden and make a statement with your wallet OR keep buying Madden. That's the choice you and others have a consumer and it's a darned powerful one. The worst mistake you can make is thinking you are only one person and if enough people are really that upset about Madden then something could be done if you all decide to not buy the game. Otherwise, you are just part of a vocal minority and that's simply that.
# 10
RaychelSnr @ Dec 23
@Blue Line -- That's a point I think that shouldn't be lost on gamers. Even more importantly, why not just have some fun with sports games and if you don't like one don't buy/play it. Simple as that.
# 11
RaychelSnr @ Dec 23
@raiders81tim -- I hope you didn't spend more than 5 seconds coming up with that amazingly well worded counter argument. I must secede to your brilliant intellectual prowess now.
# 12
RaychelSnr @ Dec 23
@hova That's really the point that comes out of this. If you don't like a product don't buy it. If you buy the product, quit trying to blame others for you wasting your money. You made the decision and you bought the game, by now anyone complaining should know better.
# 13
Vaporub83 @ Dec 23
Does anyone know why there wasn't a NFL 2k4? It it worth the thought that since 2k was off for a year, it caused them to re-enter the market at a discounted rate.
# 15
khaliib @ Dec 23
Well Chris, I will say this. Some of your responses to other posters are disturbing in that your responses seem to attack their intellect with statements like "To say an argument has validity to it because a judge let it be heard is misinformed of our legal system at best" on the issue because there is a diffenent interpretation than what you'be laid out.
You guys have warned and even "Banned" posters for responding in the same like manner. When Dev's visit, you say insulting their intellect and such will not be tolerated.
Well I would say shouldn't the standard of respect for different interpretations start from the top with you guys?
Because to be frank, we are all just assumming as though we really know what the real deal is and how things would turn out.
And yes, I do have some understanding about our Legal system since I've had to participate in the process of submitting a similiar claim against a company larger than EA. Unlike other legal cases that Judges allow to be argued in court, these type of claims must pass a validity test in order to be heard in court because of the difficulty to prove such violations and to prevent frivolous lawsuits wasting the courts time. That's why I said there must be some validity to the claim in that the Judge set for arguments to be heard in court because it passed the biggest hurdle (substance of argument) for such claims.
Just having the ability to present your argument in a court of law with such claims is a "Major" win for claimants because as you've said, these type of cases are very difficult to prove and are often thrown out before they can begin.
I thank you guys for all the hard work and time that's put into the OS site, because it truly is the best place for Sports Gamers with different opinion to voice their thoughts.
You guys have warned and even "Banned" posters for responding in the same like manner. When Dev's visit, you say insulting their intellect and such will not be tolerated.
Well I would say shouldn't the standard of respect for different interpretations start from the top with you guys?
Because to be frank, we are all just assumming as though we really know what the real deal is and how things would turn out.
And yes, I do have some understanding about our Legal system since I've had to participate in the process of submitting a similiar claim against a company larger than EA. Unlike other legal cases that Judges allow to be argued in court, these type of claims must pass a validity test in order to be heard in court because of the difficulty to prove such violations and to prevent frivolous lawsuits wasting the courts time. That's why I said there must be some validity to the claim in that the Judge set for arguments to be heard in court because it passed the biggest hurdle (substance of argument) for such claims.
Just having the ability to present your argument in a court of law with such claims is a "Major" win for claimants because as you've said, these type of cases are very difficult to prove and are often thrown out before they can begin.
I thank you guys for all the hard work and time that's put into the OS site, because it truly is the best place for Sports Gamers with different opinion to voice their thoughts.
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