Madden 12 News Post

Why the NFL’s Labor Strife Might Be the Best Thing That Happened to Madden (Kotaku)

08:20 PM - February 19, 2011 by Steve_OS

Kotaku's Owen Good explains why the NFL’s labor strife might be the best thing that happened to Madden.

Quote:


	"It appears to be a win-win: EA Sports gets cash relief in a year when it's telling investors that its flagship title may take a dive at the cash register because of the league's overall woes. The NFL can kick the can down the road another year and negotiate this license when its product is a lot stronger. But when the league does sit down with EA Sports, or anyone else, it still may not like what it hears."

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# 21 capn_razzamataz @ 02/21/11 02:15 AM

Quote:

Originally Posted by dickey1331


	Ok and you’re still stuck with one company. What if someone doesn’t like NBA 2K and liked Live/Elite but now they don’t get to play it because it doesn’t exist anymore. Competition should make both products better.

I kind of get what you're trying to say, but that example doesn't work very well because the Live/Elite franchise isn't dead; they're just taking a year "off" to improve/refine their game. 2k kept improving at a rate that EA couldn't keep up with. EA took a gamble and tried something new and innovative, but couldn't get the game to a releasable state within one year/cycle. The person that that likes EA's product more will get their new game; just a year later and far more polished and complete than if EA had released it on time.

Even if EA did drop out of the basketball videogame market altogether, it would've been because 2k constantly improved their game at a rate that EA couldn't keep up with; not because 2k inked a deal with the NBA.

EDIT: To add to my last point: if EA (or anybody else) ever wanted to enter the basketball videogame market, they would be able to do so at any point unlike the NFL deal.

# 22 SageInfinite @ 02/21/11 02:32 AM

Yea people forget NBA Live used to constantly outsell NBA 2k, despite 2k having the better game almost every year. It wasn't until this gen(I think 2k9 actually) that NBA 2k started to also win the sales war. Who knows if this would've happened with Madden/2K as well.

# 23 RGiles36 @ 02/21/11 09:44 AM

Quote:

Originally Posted by LiquorLogic


	I have a strong feeling that when this console generation is over, *the exclusive license will also end.* The license is so darn expensive; nobody, but EA, is paying for it. *The NFL is creating a situation in which they'll have virtually no leverage with the exclusive license because there's only one bidder.*

Why do you feel as though the exclusive license will be over w/ this generation? Even if there's only one bidder (EA), why would EA pass up on the opportunity to continue to own the NFL videogame market?

# 24 roadman @ 02/21/11 02:00 PM

Quote:

Originally Posted by LiquorLogic


	I don't agree that another company can't, or won't, make an NFL football game. It won't over take Madden,in terms of sales, but if companies aren't paying out the you know what for licensing cost, and only give the NFL royalties and a percentage of sales, their games could be a financial success in their own right.

I understand what you are saying and I still feel that is an ideal world. In reality, what company has enough start up cash for R @ D and put out a football game? That company would be taking on a huge risk going up against the Madden name. If Madden sells 5 million copies, do you really think a company will sell more than 500,000 copies going up against Madden and become profitable?

The NFL won't give up exclusivity. EA might be in the drivers seat, but it's still an NFL driven game. I feel EA will be paying less for the exclusivity vs just royalties and a percentage of sales.

# 25 roadman @ 02/21/11 03:16 PM

Quote:

Originally Posted by adfletch71


	If 2k was too continue making a NFL game, I don't think madden would be selling 5 million copies. First off the 2k crowd wouldn't be buying madden, second if 2k was too build off of 2k5 presentation and have ALLPRO2K8 gameplay it would really hurt madden in its current state. Look at NBA today and MLB today implementation, its really adds to the immersion. If 2k was still in the game football wise, Madden would be selling a lot less in my humble opinion, but well never know that fact.

My point is that 2k would need to get to first base before throwing out what if's. They need the capital for start-up and perhaps licensing fees and I don't feel they have the capital do do that, especially if they are looking for someone to buy them out.

# 26 roadman @ 02/21/11 04:07 PM

Quote:

Originally Posted by LiquorLogic


	I think the NFL is going to have give up exclusivity because no one's going to pay for it. Exclusive licenses are expensive because they make up for the fact that there's only one company paying for it. The appeal, of exclusivity, for the NFL was the fact that they can make more money than with multiple publishers. If that is know longer the case, because EA won't pay that hefty fee anymore, they may go back to multiple licenses.

I would love more options as a consumer, but right now, EA and the NFL have a business agreement. I see EA and the NFL coming to a compromise vs EA giving it all up.

That's what businesses do, they compromise on both ends, like they did on the current license.

Otherwise, at this stage, it's all just wishful thinking and holding out hope.

# 27 RGiles36 @ 02/21/11 05:14 PM

Quote:

Originally Posted by roadman


	I would love more options as a consumer, but right now, EA and the NFL have a business agreement. I see EA and the NFL coming to a compromise vs EA giving it all up. That's what businesses do, they compromise on both ends, like they did on the current license. Otherwise, at this stage, *it's all just wishful thinking and holding out hope.*

This is where I'm getting at.

It would be nothing short of wonderful if the situation plays out like LiquorLogic believes it will. I just feel like we are escaping reality if we seriously entertain the potential of this occuring.

If I'm a business, yes, the money matters. A lot. But there's no way in hell I'm going to let another capable company enter the market when I have the means to freeze them out.

# 28 roadman @ 02/21/11 10:19 PM

Quote:

Originally Posted by LiquorLogic


	What does EA have to gain from compromising after the license expires ? The current license is different. EA was worried that a possible lock out would kill their sales, so the NFL reduced their financial obligation, but, in return EA agreed to extend the deal and extra year. EA wanted some relief; the NFL wanted another year of security with the license; that's a compromise. It's not really wishful thinking. Yes, it's possible that another company enters the fold if EA doesn't renew the deal with the NFL, but it's also possible, as you pointed out, that no other publisher will be willing to develop a football game because they don't think that they can compete with the EA. The game will be better if the exclusive license ends regardless of whether EA has an actual competitor or not. They won't be paying that hefty fee, so they'll be able to put more money into the development of the game. Of course, a competitor would be ideal for us.

I see what you are saying, but respectfully disagree.

I just don't see the NFL and EA breaking up their partnership from the past 7 yrs. (9 yrs at the end of the license) Instead of paying $400 million for the license, maybe the pay 200 million for that same license. That makes the NFL happy and EA happy they can stole away 200 million for production.

I like your idea, but my gut is telling me that Madden and the NFL will be in it for the long haul.

# 29 blklightning @ 02/22/11 04:04 AM

all i know is that this license needs to end. i'm tired of seeing my favorite sport being the worst represented of the lot in the video game world. the show and nba 2k can amaze you at times. but madden just continues to tread the same waters. and in some areas, they've managed to drain a bit out of the pond.

# 30 Cryolemon @ 02/22/11 11:17 AM

As has been said, the next generation of consoles will be interesting. Now, we don't know when they will be coming out, but I know that developers get the dev kits well before the consoles are released (for obvious reasons).

Lets say the PS4 is going to come out in late 2014 (That may or may not be a reasonable guess, but it'll do). The developers probably get the dev kits late 2013, which gives them 8-9 months to develop the first batch of games. If a company can develop a half decent football engine in that time and stick a generic league and some simple but deep customization over it then they might have a chance to keep their head above water against Madden '15 regardless of the license situation. We all saw the abomination that was Madden '06, and maybe people will be more cautious about trusting EA (or any company I guess) to deliver on the first iteration on a new console.

# 31 mestevo @ 02/22/11 11:41 AM

Quote:

Originally Posted by adfletch71


	If 2k or Sony was too make a football game this gen, with the technology and ambition they have with there other titles, it would be a rap. It wouldn't be long before these company make a great football game. Wasn't it Ian himself that said he tired of people comparing Madden and 2k5 in the same sentence? Well Ian, what's the problem? Madden trying too cater to the casual gamers have bit them in the ***...look at the sales for proof. So they need too get the fundamentals of football right and surpass NFL2K5 presentation and ALLPRO2K8 GAMEPLAY too shut up alot of the majority of hardcore fans. They have the games too study, so I don't understand what's the problem? We not asking Madden to be just like those games, but we are asking that the presentation and gameplay surpass those games , its 2012 how much longer do we have too wait?

If sales are your barometer for success then Madden was in the right all along and continues to do so. PS2 sales vs the HD consoles show an improvement in market share from one generation to the next.

Quote:

Originally Posted by Cryolemon


	As has been said, the next generation of consoles will be interesting. Now, we don't know when they will be coming out, but I know that developers get the dev kits well before the consoles are released (for obvious reasons). Lets say the PS4 is going to come out in late 2014 (That may or may not be a reasonable guess, but it'll do). The developers probably get the dev kits late 2013, which gives them 8-9 months to develop the first batch of games. If a company can develop a half decent football engine in that time and stick a generic league and some simple but deep customization over it then they might have a chance to keep their head above water against Madden '15 regardless of the license situation. We all saw the abomination that was Madden '06, and maybe people will be more cautious about trusting EA (or any company I guess) to deliver on the first iteration on a new console.

Like the transition to the HD consoles, this generation will outsell the next one for the first year or so anyways.

# 32 mestevo @ 02/22/11 12:03 PM

Quote:

Originally Posted by adfletch71


	mestevo...show me the chart my friend? From what I have seen and heard, last generation consoles for madden sold almost 7.5 million for Madden 2005. Madden hasn't sold that many copies yet in a annual year of the current consoles. So that's not improvement, that's decline. Madden has been around 5 million copies yearly on this gen consoles.

This was covered in the other thread:

Quote:


	That's actually a good point, looking at it again, the HD consoles combined have surpassed the numbers of the highly regarded PS2 versions, with far fewer consoles on the market. Sales leading up to 10/11 were caught up in the gradual death of the PS2 which was still selling over 1m copies until this year with the huge drop from 948k to 391k (so far). PS2 topped out at 4.36m with Madden 05. Madden 10 on PS3/360 sold 5.44m copies in the last 70+ weeks, and 11 is sitting at 4.2m at 27 weeks. Makes the move towards Facebook and microtransactions look a lot smarter if they think they're reaching market saturation. Get potentially more $$ per box, online pass and more DLC generates revenue from used sales that they got almost nothing from before.

Original Xbox sales were almost irrelevant the last generation, they didn't peak until Madden 06 and then dropped sharply, while the PS2 took until 2009 to fall below the best numbers the original Xbox ever saw. The stacking of sales (PS2 and HD consoles), for the first part of this generation create an illusion that Madden is on the decline when sales are probably flat at best this generation.

# 33 mestevo @ 02/22/11 03:06 PM

Quote:

Originally Posted by LiquorLogic


	There's really no value in an exclusive partnership for EA anymore. There won't be any competitors, viable ones anyway, so EA has no one to freeze out. The NFL is going to have to take what EA is willing to give.

There will be give and take for sure, as there is in any business agreement, the license holds a lot of value exclusive or otherwise for both sides.

The extension just ensures that the NFL won't be making a new deal after a season potentially marred by a lockout.

# 34 roadman @ 02/22/11 03:18 PM

Quote:

Originally Posted by LiquorLogic


	The NFL is going to have to take what EA is willing to give.

Exactly my point above. The NFL will still hand out an exclusive license or agreement to EA for a huge yearly deduction from what they are paying now. We both agree EA will be paying less, you just don't feel it will be an exclusive license because EA doesn't need one.

EA may not need an exclusive license anymore, but that is the way the NFL operates. Doesn't matter if it's called an exclusive license or agreement the way the NFL sees it.

It's my firm belief that the partnership between EA and the NFL won't go away.

We'll see what happens, though, won't we?

# 35 Cryolemon @ 02/22/11 04:44 PM

Quote:

Originally Posted by mestevo


	Like the transition to the HD consoles, this generation will outsell the next one for the first year or so anyways.

Certainly, but the transition levels the playing field somewhat.

# 36 kjcheezhead @ 02/22/11 04:51 PM

Quote:

Originally Posted by roadman


	Exactly my point above. The NFL will still hand out an exclusive license or agreement to EA for a huge yearly deduction from what they are paying now. We both agree EA will be paying less, you just don't feel it will be an exclusive license because EA doesn't need one. EA may not need an exclusive license anymore, but that is the way the NFL operates. Doesn't matter if it's called an exclusive license or agreement the way the NFL sees it. It's my firm belief that the partnership between EA and the NFL won't go away. We'll see what happens, though, won't we?

The partnership won't go away but the point is, EA is holding all the cards. After this contract expires, EA can basically go to the NFL and offer 1/10th of what it is paying now. If the NFL doesn't like the offer what are they going to do? Not sell an NFL videogame for 2-3 years while another company develops one?

# 37 roadman @ 02/22/11 05:07 PM

Quote:

Originally Posted by kjcheezhead


	The partnership won't go away but the point is, EA is holding all the cards. After this contract expires, EA can basically go to the NFL and offer 1/10th of what it is paying now. If the NFL doesn't like the offer what are they going to do? Not sell an NFL videogame for 2-3 years while another company develops one?

I don't see the disagreement here.

In the above posts, I've mentioned that EA will throw out a reduction on what they are paying now.

EA offers to pay $200 million per year instead of the $400 million/yr for the license.

That's where the give and take comes in.

Similar to the CBA talks going on. There will be an agreement at some point in time that won't disrupt the flow of football and video game football.

# 38 roadman @ 02/22/11 05:21 PM

Quote:

Originally Posted by LiquorLogic


	What value will the an exclusive license have, for EA, if there are no viable competitors ? The reason the NFL loves exclusive licenses is because they're more expensive, and the NFL can make more money awarding exclusive licenses. The licensees love exclusive licenses because it guarantees them a hundred percent of the market share. What the NFL has done is price all of EA's competitors out of the market; they, the NFL, have eliminated any benefits to an exclusive license, so I see no reason why EA would pay for one again. It doesn't matter how much the NFL loves exclusive licenses. In the gaming world, there's no demand for an exclusive license. Also, there are really no benefits for the NFL, in giving out a cheap exclusive license, to EA when they could make more money awarding multiple licenses. If the license is very expensive, it will be exclusive; if it's not, it won't be exclusive because it won't make sense for the NFL.

It doesn't matter if you call it an exclusive license or an agreement, EA or any other company will still be paying upfront fees for using the teams, stadiums and any other trademarks.

At this time, I don't see any different than EA and the NFL hammering out an exclusive deal that is fair for both sides.

In the end, it's a business agreement between both parties. If the NFL wants to make it exclusive and EA says, we'll make it exclusive for $200 million per year, both parties will start compromising in getting a deal done. If the NFL can still make more money with $200 million with one company vs trying to make multiple deals with other companies and receiving less money, they will stick to an exclusive with the one company.

I still feel it's wishful thinking that the NFL will give up exclusivity in any market.

Why would you ruin a 9 yr old deal that you have going with a customer or vendor? Just because one party doesn't think there is a need anymore? That one party, EA, still needs to use all the teams, coach's, stadiums, trademarks and that still will come at a price that the NFL and EA will negotiate on.

# 39 RGiles36 @ 02/22/11 05:41 PM

Quote:

Originally Posted by kjcheezhead


	The partnership won't go away but the point is, EA is holding all the cards. After this contract expires, EA can basically go to the NFL and offer 1/10th of what it is paying now. If the NFL doesn't like the offer what are they going to do? Not sell an NFL videogame for 2-3 years while another company develops one?

This, I agree with. EA will hold many (if not all) of the cards as far as the price and negotiation. But make no mistake about it, they're not naive enough to lock into a non-exclusive agreement.

LiquorLogic envisions a scenario where EA will let their guard down and let a competing company slip in through the back door. It doesn't make any sense to me...

Quote:

Originally Posted by LiquorLogic


	*It doesn't matter how much the NFL loves exclusive licenses.* In the gaming world, there's no demand for an exclusive license. What the NFL is going to have to is basically offer EA a license for a pennies on the dollar, *make it non-exclusive*, and award other publishers licenses whenever, if ever, another publisher decides to make a football game. It would be stupid for EA to guarantee the NFL a large sum of money when they're the only publisher willing, or able, to produce an NFL game.

What do you mean it doesn't matter? It's HOW they do business!

I mean, to an extent, we're all just making presumptions. But I still say you're reaching to presume the NFL is going to "have to" make the next agreement non-exclusive.

I'd say you're scenario is the likeliest if we're ever to see multiple NFL games again. But if this were Oddsmakers (PTI), I'd put the odds of this scenario occurring at 7%.

# 40 roadman @ 02/22/11 05:44 PM

Quote:

Originally Posted by rgiles36


	This, I agree with. EA will hold many (if not all) of the cards as far as the price and negotiation. But make no mistake about it, they're not naive enough to lock into a non-exclusive agreement. LiquorLogic envisions a scenario where EA will let their guard down and let a competing company slip in through the back door. It doesn't make any sense to me... What do you mean it doesn't matter? It's HOW they do business! I mean, to an extent, we're all just making presumptions. But I still say you're reaching to presume the NFL is going to "*have to*" make the next agreement non-exclusive. I'd say you're scenario is the likeliest if we're ever to see multiple NFL games again. But if this were Oddsmakers (PTI), I'd put the odds of this scenario occurring at 7%.

This is what I agree with.

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