EA Being Sued Over Madden Monopoly

Story Courtesy of “Operationsports.com”

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 Gamebreakerfailed 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.

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.