The Madden Monopoly Lawsuit and the Future of Football Gaming - RaychelSnr's Blog

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The Madden Monopoly Lawsuit and the Future of Football Gaming Stuck

Posted on July 22, 2012 at 04:34 PM.

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The settlement carries major ramifications for football gaming, but some of it is nuanced.

The news that came out on Friday afternoon of a settlement reached by EA and the law firm representing customers in a price fixing lawsuit alleging the actions taken by EA and it's licensing partners were monopolistic.

The immediate ramifications were real: consumers were going to get some of the money they spent on games back if they so chose (I personally am not opting in to it), and EA will not exclusively sign licensing agreements with the NCAA or the AFL for five years after the current deals expire.

In layman's terms, this means that any company can develop an NCAA Football and AFL game upon the completion of the current licensing deals.

I don't think any reasonable person would think EA would unwillingly give up an exclusive license for a deal it wants to keep without much more of a fight which is likely why the NFL exclusive license was retained and not the NCAA license.

Almost certainly, EA saw the foolishness of the NCAA Football exclusive license given the market reality and found that part of the deal expendable. It has been a full decade since someone tried to compete with EA on the NCAA Football front, and since Gamebreaker failed back at the turn of the millennium no one has really mounted a serious and sustained challenge toEA's NCAA Football dominance.

With NCAA Football enjoying de-facto exclusivity, why pay the exclusive premium anyways?

De-Facto Exclusivity

The leadership at EA had to have found ending exclusivity on NCAA perfectly reasonable given the market reality. Almost certainly, no one is going to jump into the NCAA Football development game.

For starters, the cost of developing a game engine and presentational experience on par with the current NCAA Football, despite it's flaws, would be a multi-year effort. Given the amount of teams, the amount of detail needed, and the amount of marketing power and/or game quality superiority needed to actually break even in the endeavor of creating an NCAA Football game, it's doubtful any company is going to be willing to try it.

For an NCAA Football game to be successful commercially, it would have to sell just as many if not more copies than EA's NCAA Football game currently. To do this, you either have to poach (better quality) EA customers or create new customers of NCAA Football games in the order that you'd basically double the market size yourself of what is already a fairly stable but small market.

In short, business wise, there's not much hope of another game actually competing in the NCAA Football genre and actually making money.

With no real commercial appeal, losing the AFL license isn't something to cry over.

AFL A Non-Issue to EA

There has not been a new, major Arena Football League game released in over five years to my recollection. This is due to the simple fact that the Arena Football League has basically floundered and has been on the verge of extinction for a few seasons and it even cancelled it's 2009 season before relaunching in 2010 to some commercial success.

But the league has undoubtedly suffered and it's no longer a marketable brand on a massive Nationwide Scale. So the chances of another company actually picking up the license and running with it in a big-box type of deal is quite slim.

There is, however, a decent chance someone might try to create a smaller, XBLA/Indie type of AFL game -- which is worthy of watching for sure.

The fate of the football gaming free world will be determined in the next year.

The Fate of the NFL License

The real question is, and will be, what happens in the next 12 months or so as Madden's exclusive deal with the NFL ends.

It's worth noting that the NFL initiated the era of exclusivity and basically told companies that they were going to be bidding for one spot in the NFL Development arms race. This poses an interesting dilemma for EA going forward -- as it's clear based upon earlier comments that EA has been less than thrilled about the financial profitability of the NFL's second biggest license.

Remember this quote?

Quote:


	"For one of our core partners in a difficult environment, we say let�s look at this, and maybe it makes some sense to extend something out longer and give our partner some relief in the short term but gain something on the back end,� said Jacksonville Jaguars owner Wayne Weaver, chairman of the NFL�s business ventures committee.

It certainly didn't sound like both parties were completely happy with the deal. The NFL cut EA a break on licensing costs last year, but got another year out of the deal -- which if EA were totally happy with the setup would've been the best of every world.

But there is no indication the NFL is going to end their practice of licensing video game rights to more than one company. So it's very likely EA is trying to posture ahead of renegotiations so they can get a better deal this time around.

This next 12-14 months will be key, as EA's exclusive deal with the NFLPA ends this calendar year. So if EA can successfully renegotiate deals on both fronts, it will propel them into the next console generation and any hope any other company might have had of developing an NFL game will be all but gone.

Simply put: the status quo from our end might not be changing.

Revealed Intentions

What the lawsuit settlement really has done is underscore how EA basically see's their gaming properties. NCAA Football ultimately, can be expendable just as it's NCAA Basketball brand was. Given current litigation by the likes of Sam Keller and Ed O'Bannon on player likenesses in EA college games still hanging out there, there's always a chance the NCAA Football franchise could go away if the suit doesn't go EA's way.

As far as the NFL license goes, it's a wait and see. Most likely, the NFL and EA are going to agree to an extension of some sort because the odds of another company wanting to invest into the NFL gaming market on an exclusive basis is not very high and the NFL has shown no interest of divvying out game development rights to more than one company. Thus, EA probably is working on getting as much leverage as possible in order to get a sweeter deal from the NFL as negotiations occur in the next year or so.

But as they say, time will be the judge of that.

Comments

# 16 jersez @ Jul 23

People act like they don't know the answer to this problem. STOP BUYING MADDEN. So many of us bitch about no 2k football, yet most of you give in and buy madden___ . It's not that complicated the NFL wants to make money, once they see madden failing to sell, they'll have to negotiate with someone that will make money for them. The last madden game I've brought, hell the last EA sports product I've brought were Live 05 and Madden 05. Stop giving in and maybe we can get a decent football game. By us not buying madden EA will have to look at their product and improve it, so it's nothing but positive outcomes by not buy madden.

# 17 tarek @ Jul 23

I'd like to see a company seek a niche in this market, now that they can be licensed and create a sports management title. It would be difficult to meet, under a short time frame, the graphics and gameplay engines that EA currently uses and has access to with Madden. BUT they could go down the path of Sports Interactive and create like a Football Manager title with an NCAA flavour.
I know a company like Grey Dog software has created one (not sure if it's any good) and there are sports management college basketball titles (Wolverine Studios Draft Day Sports College Basketball).
Although I think there would not be the same market as there is for Football Manager, it could be something that could in turn be competitive and take a chunk out of EAs market share.

# 18 truintellectplaya @ Jul 23

I disagree with the OS staffs opinion that no-one else will jump into NCAA gaming as much as I disagreed with them telling us time and time again how Live was going to come back this year and make a dent in the market sales wise. We haven't heard them beat that over our heads since E3 and the letdown that many experience from Live there. Someone will jump into the market and they will make a game so good that the people will rather play college football than Madden and it will not take them anymore than 5 years to do it.

# 19 testorz @ Jul 23

I would prefer having a choice among sports games ! I've been playing Madden and NCAA football since the old 16-bit SNES days so when 2K sports came along with a fresh take on football, I was excited and often I would buy both Madden and NFL 2K/

# 20 tical2399 @ Jul 23

How do you opt into the settlement?

# 21 debauchlord @ Jul 23

This lawsuit essentially means nothing. Everyone here that wants "competition" in NFL gaming is never going to get it as long as the NFL wants only ONE licensee. EA even fudges on it because they are never sure they can turn a profit, so you think 2K will jump in the deep end on this? That is just crazy. If you want to boycott anything, boycott the NFL, or write them and let them know your problems. EA is the middle man here.

# 22 BK_NC @ Jul 23

I'm not fan of the way EA has handled NCAA and Madden since going exclusive. I seem to recall there were features in the PS2 glory days in these games that still never made into the "next-gen" 360/PS3 versions.

I think the article hit the nail on the head. EA really isn't giving up anything in this settlement. It gets this lawsuit out of their hair, and the NFL's also. And it will probably make it cheaper for them to make NCAA football games in the future. And this is a good thing.

Why is it a good thing? We know EA gave up NCAA basketball games because of poor sales. Last game they made I believe was the March Madness 08 version which sold about 500k copies.

NCAA Football 12 sold about 1m copies. It has been in steady decline since the NCAA Football 07 version which sold a little over 3m copies. The last glory year of PS2 sales for the franchise. Sales that have never been captured by the 360/PS3. I think NCAA Football may have been in danger of going the way of March Madness if sales kept declining in this current market with the cost of developoment coupled with the cost of maintaining and exclusive deal.

EA has had a defacto exclusive on NCAA football games even before their exclusive deal with the NCAA. I think their last real competitor was NCAA College Football 2K3 which bombed with about 70K in sales.

Even though I wish the NCAA games would get a lot better every year for $60 a pop, I don't want to see them go away altogether so maybe this settlement will be good for the genre even if no other publisher tries to compete with EA.

Here are some thoughts and opinions that have come together for since seeing the settlement announcement.

Madden is heading to a watershed moment. Madden sales, like NCAA, have been in steady decline since the 07 version. Again this was the last glory year of the PS2 which it alone accounted for as much in sales of the 07 version than what Madden 12 sold last year for both PS3/360. 10m copies of Madden sold in total for Madden 07, PS2 accounted for 5m sales. Madden 12 sold 5m total on all platforms it was available on. For me it confirms my opinions that the price of the 360/PS3 console hardware kept a lot of PS2 sport video gamers, particularly older guys in their late 20s, 30s, and 40s who are family and career guys, from making the transition to new hardware and continued sports video gaming. 6yrs into PS2 it had about 100m units out there. 6yrs into 360/PS3, they are lucky if combined they come close to that. A lot of the gamers that were shed in the idiotic pricing scheme I think was the older gamer who didn't have all the free time to play video games as someone younger. Guys who mostly played sports video games and not much else. And thus they couldn't justify spending $500+ on a new console to keep up their Madden habit. PS3 for example is only now 6yrs later at the price point the PS2 was when it launched. I don't know if you can ever get that gamer back. And it doesn't seem like EA has been able to capture any new ones.

If Madden keeps declining sales I think their is a danger EA may be financially forced to stop making Madden if 2 things happen. First, NFL holds its stance of only one video game maker and keeps the license at the 100s of millions of $$ mark. Second if the next-gen (PS4/Xbox 720 or whatever) repeat the moronic pricing scheme and come out at $500+ again.

# 23 pigpen81 @ Jul 23

I bet if someone/team makes a great playing, editable football game for the upcoming $99 OUYA, and sells it sub $10, it would be huge.

# 24 bigsmallwood @ Jul 23

I just want options #competition please

# 25 PS3rocks09 @ Jul 23

time for 2K to make a comeback

# 26 gotchaMF @ Jul 23

This is way the gaming industry is struggling. There is no creativity and no risk. Fans have been asking for a 2K football for years. Football is football, and I think the NCAA as it own game (not a Madden hand-me-down) could complete against Madden. College football is much more exciting than pro football. The crowd is louder, more tradition, and the play is more wide open. 2k should jump on this. Two years is plenty of time to create a great game. Especially, since they already have a foundation in APF.

# 27 elgreazy1 @ Jul 24

In all honesty, if people want to push for the NFL to be non-exclusive they should write Roger Goodell or any of the other power that be in the NFL. I'll probably do a little research today and find the proper contact at the NFL, and from there we should flood their inbox with - polite, intelligible & respectful - pleas to allow for non-exclusive gaming.

# 28 elgreazy1 @ Jul 24

** I have nothing against Madden or EA; I simply believe in the consumer having a choice.

# 29 Annarborborn @ Jul 24

This is not really on EA. This is an NFL issue as I see it. The NFL and a lot of leagues like exclusive deals so they can have people only identify their products in one place. It is not different than the uniforms issue from the change from Reebok to Nike. Those were exclusive contracts that the NFL wanted. If the organizations wanted to allow multiple vendors do use their names and logos, then that would be the case. It is no different than the NFL allowing only a few media outlets to use "NFL" for a show or some other branding for their network.

I am not a lawyer, but I doubt that anyone would be successful when the NFL has the right to decide who to use and control their usage of what is their team names, uniforms and stadiums.

# 30 pietasterp @ Jul 24

Nothing is going to change...as most of us predicted back in 2004 when this all went into play originally, after 1 or more years of exclusivity with the NFL, the barrier to entry for anyone else to jump into the game against an established property like Madden would basically amount to a lifetime exclusivity deal. Which is pretty much what has happened at this point. As MMChrisS pointed out in his op-ed, that is essentially what has happened with NCAA, and therefore EA is basically willing to walk away at this point as there are no other viable competitors in that arena. We all knew that when it came time for the NFL exclusivity to be re-negotiated, the NFL would be negotiating with only one interested party: EA. They (the NFL) did this to themselves by giving EA an insurmountable lead so that no other competitor will even try to wrest the NFL exclusive rights away from them. Which is fine when the market is great and the league can dictate the terms of the agreement, but now that it appears that video game sales (and console sales specifically) are in a down-turn, EA seems to be holding all the cards. EA can basically come in with a lower-end offer, and the NFL will have to take it if they care at all about having their brand in a video game, because no one else is interested in committing the time and resources into developing a new football game. Ditto NCAA.

The only way a competitor can overtake EA in an entrenched position is by slowly building a fanbase by having a clearly superior product over many years - in other words, the "NBA 2k" blueprint. EA was the clear leader in hoops going back to "Lakers vs Celtics" on the Genesis (still my fave game of all-time, BTW...), but only after the better part of a decade of building a superior basketball game did 2k finally take the crown. Maybe NFL2k was headed that way as well - we'll never know. But what would basketball gaming look like today if NBA2k had been cut off at the knees in 2004?

Anyway, this has been discussed to death, but I, along with most people, have resigned myself to the fact that there will not be a non-EA football game for the forseeable future. So I hang on to my copy of NFL2k5 as a point of pride and miniscule protest...not exactly the Boston Tea party, but hey - it's something....

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