EA/NFL Extend NFL Exclusive License by One Year to 2013

[ryan36]

Quote: Originally Posted by LiquorLogic

It doesn't matter. If a retailer makes less on the game, either their shipments will have to decrease or EA's price for the shipment will have to decrease.

Actually the cheaper it is , demand goes up. Profits go down in margin, but more units ship at a cheaper price.

[LiquorLogic]

Quote: Originally Posted by ryan36

Actually the cheaper it is , demand goes up. Profits go down in margin, but more units ship at a cheaper price.

You're acting as if a retailer is going to have no reaction, what so ever, to decreasing profit margins.

If a retailer orders 10,000 units and only sells 7,500 in the time frame that they wanted, how many units do you think the retailer will order the next time around ?

If the demand decreases for the buyer, it also decreases for the seller. If a retailer sees the demand decrease, first they'll decrease the price, then they'll decrease their shipments. When the publisher (EA) sees this, they'll lower the price of their shipments, or ship less units. Either way, they make less money.

One hand washes the other.

[falconfansince81]

pasta padre's in sight on the matter, decent read with a couple new perspectives:

http://www.pastapadre.com/2011/02/16...atisfied-party

[mestevo]

Quote: Originally Posted by LiquorLogic

You're acting as if a retailer is going to have no reaction, what so ever, to decreasing profit margins. If a retailer orders 10,000 units and only sells 7,500 in the time frame that they wanted, how many units do you think the retailer will order the next time around ? If the demand decreases for the buyer, it also decreases for the seller. If a retailer sees the demand decrease, first they'll decrease the price, then they'll decrease their shipments. When the publisher (EA) sees this, they'll lower the price of their shipments, or ship less units. Either way, they make less money. One hand washes the other.

Except that none of that has anything to do with the pricing for Madden 11. Prices were decreased for marketing purposes by retailers, not by EA. If EA reduced the price, it would have seen a reduction uniformly across all channels (and MSRP wouldn't be $59.99 still).

Here's what it looks like when a publisher drops the price:

http://camelcamelcamel.com/Backbreak...uct/B002WSR8CQ

Here's what it looks like when a popular title is placed on sale:

http://camelcamelcamel.com/Madden-NF...uct/B002I0J4FW

(click all for the range when those pages load btw)

As you can see, sale happens, game returns to MSRP, or Amazon's general discount off MSRP for most titles. You can clearly see that Madden still has a $60 price, while Backbreaker dropped in $10 increments to the $20 it is today. Meanwhile Madden had sales during the holidays, and has returned to its discounted MSRP of $~55.

[CaptainZombie]

Quote: Originally Posted by mestevo

Except that none of that has anything to do with the pricing for Madden 11. Prices were decreased for marketing purposes by retailers, not by EA. If EA reduced the price, it would have seen a reduction uniformly across all channels (and MSRP wouldn't be $59.99 still). Here's what it looks like when a publisher drops the price: http://camelcamelcamel.com/Backbreak...uct/B002WSR8CQ Here's what it looks like when a popular title is placed on sale: http://camelcamelcamel.com/Madden-NF...uct/B002I0J4FW (click all for the range when those pages load btw) As you can see, sale happens, game returns to MSRP, or Amazon's general discount off MSRP for most titles. You can clearly see that Madden still has a $60 price, while Backbreaker dropped in $10 increments to the $20 it is today. Meanwhile Madden had sales during the holidays, and has returned to its discounted MSRP of $~55.

The one thing I do not understand is that now both NCAA and NFL seasons are over, and both games are still retailing for $59 unless found on sale. You would think that once the season is over, they would drop the prices a little bit on these for those that might want to bite with still having Superbowl or Bowl game(s) fever and they can make a few more sales.

[EddieV]

Regardless of how much profit EA makes per copy sold, let's look at the sales numbers to date (per vgchartz -- which was just updated today):

M10 (across all platforms): 7.36 million

http://www.vgchartz.com/worldtotals....=50&sort=Total

M11 (across all platforms): 5.36 million

http://www.vgchartz.com/worldtotals....=50&sort=Total

Looks like EA is actually lucky that there is the threat of a lockout -- I'd be looking for concessions from the NFL, too, if my numbers declined that much in a non-lockout year.

[roadman]

Quote: Originally Posted by EddieV

Regardless of how much profit EA makes per copy sold, let's look at the sales numbers to date (per vgchartz -- which was just updated today): M10 (across all platforms): 7.36 million http://www.vgchartz.com/worldtotals....=50&sort=Total M11 (across all platforms): 5.36 million http://www.vgchartz.com/worldtotals....=50&sort=Total Looks like EA is actually lucky that there is the threat of a lockout -- I'd be looking for concessions from the NFL, too, if my numbers declined that much in a non-lockout year.

I doubt that includes the sales of MUT, Facebook and other DLC.

[LiquorLogic]

Quote: Originally Posted by EddieV

Regardless of how much profit EA makes per copy sold, let's look at the sales numbers to date (per vgchartz -- which was just updated today): M10 (across all platforms): 7.36 million http://www.vgchartz.com/worldtotals....=50&sort=Total M11 (across all platforms): 5.36 million http://www.vgchartz.com/worldtotals....=50&sort=Total Looks like EA is actually lucky that there is the threat of a lockout -- I'd be looking for concessions from the NFL, too, if my numbers declined that much in a non-lockout year.

Ouch ! Unless my math is wrong, which is a distinct possibility, I hated math growing up, sales for Madden 11 are down a whopping 27%.

Looking at these numbers, Pasta's article, and considering the hefty price tag of the license, EA may not want to extend the deal when it expires. Pasta's article made it sound like EA only agreed to the extra year because that's the only way the NFL would give them some relief this year.