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

# 31 Bob Sacamano @ Jul 24

I am currently an antitrust attorney in Washington D.C., and two years ago I visited my favorite website, Operation Sports, to voice my concern Madden had blocked competition to hike pricing and relax innovation, stunting the emergence of online features including coop online franchises. My criticism of Madden got my "greeklee11" screen name permanently banned from the site (http://www.operationsports.com/forum...thread-45.html). Shame on you Operation Sports.

# 32 Multi @ Jul 25

@LastChanceAvalanche That'd be great, but I seriously doubt EA would be willing to let such a lucrative license slip from their grasp.

As has been said, a petition or campaign of some sort would probably have a higher chance for success, and even then that chance is still painfully low.

# 33 Nicox707 @ Jul 25

Ncaa is alot better then madden, hope they dont get rid of it.

# 34 Skyboxer @ Jul 25

Well for me I still can't see putting any blame on the exclusive on EA.
It's the NFL that wants it and a smart business decision by EA to grab it.
I only fault EA in the area of not advancing the genre.
It's all on the NFL for the reason we have no other choice.

# 35 pokerplaya @ Jul 25

Great job on this lawsuit. NOT.

All you did was put up a game a good number of people play up for absolute extinction. As they so eloquently stated, its not financially viable for any other company -- AND EA might just decide its not worth the trouble.

All over what probably amounts to $20 maybe per copy that they sued for? They certainly deserved punitive damages, but they obviously didn't get that.

This is a lose-lose situation for gamers. There still isn't any competition to force them to make a better game, yet now there's a real chance that the game could go away. Again, AWESOME JOB!!

# 36 nortran11 @ Jul 26

This is something that should have happened a LONG time ago. EA had stiff competition in the 2K series, so instead of raising their game they just ensured that 2K was out of the picture with the exclusive license. Madden has suffered as a result. Instead of improving game play to stay ahead of the competition, we are given virtually the identical game with some graphical improvements and updated rosters. Here's to healthy competition!

# 37 sphinxnole @ Jul 26

What part dont you guys understand THE NFL only wants 1 company making a NFL football game.. I could careless who makes the game but the NFL has basically said there will be NO COMPETITION.. Im not a fan boy of 2K or EA I just want a GREAT game... I do LOVE College Football & I would be SO PISSED if we didnt have any college football games.. These people suing because their professional careers Flamed OUT are the ones that Im Pissed at..!! Shoot they dont even use player likenesses or names but Sorry @$$ Keller & O'Bannon need to get over themselves.. When was the last time they were even in a College Game..

# 38 DonScrillinger @ Jul 28

come on 2k give us sumthing

# 39 Kentucky_Wildcat23 @ Jul 28

Would love to see 2k get another shot at an NFL game. They did great with 2k5 and I believe they can create some real competition for EA and make them raise their development and game to another level. Competition only makes companies work that much harder to release a great game!

# 40 panthersfanstev @ Jul 28

Not playing Football video games, gives me more time to play other great games like NBA 2Kseries, Skyrim, Batman AC, etc. So go ahead, keep the deal, I have learned to live without Football games.

# 41 TeamHawkins @ Jul 29

If 2K used APF's mechanics for a new NCAA Game, the gameplay itself would destroy NCAA Football. This story's author is another EA crack boy. NCAA is nothing to harp over, other than the recruiting feature which for years still has it's own issues. But the gameplay for both NCAA and Madden can easily be taken down. Gamebreaker's mechanics destroyed what we have from EA, as did APF. Frankly I think 2K should make another College Hoops. And continue to let EA embarrass themselves through poorly released football titles.

# 42 rangenius @ Jul 29

I would love EA to get some competition. The game has been stale since 2005. They need to focus on the franchise and online franchise part of it, but they never seem to do it, so screw them.

# 43 boodaville @ Jul 30

Finally glad to hear a mention of College Hoops 2K.....
That's the only thing I would like to see come back....it was a great game, and I'm sure with the advancement of the NBA2K series...College Hoops would be pretty amazing right now.

# 44 holland23 @ Aug 1

EA is a gimmick... they hype up all the changes they've made from one year to the next but you pop the game in and you can't tell the difference. i'm a big football fan so i purchase ncaa, but if there was an alternative i would be going to it.

# 45 DedicatedLeaguesNCAA @ Aug 1

I hope another company (such as 2kSports) takes a leap of faith into the NCAA football developing fight. I believe that EA Sports has shown their true feelings towards NCAA Football with the release of NCAA '13 being so similar to NCAA '12. I really think they would have a fighting chance in taking over the NCAA market as they have with Baseball and Basketball.

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