EA captures Video Game Market

[SenorMatt24]

By Darren Rovell
ESPN.com
*

Electronic Arts, the leading maker of sports video games, signed an exclusive five-year contract with the National Football League and the NFL Players Association, deals that will give the company sole possession of the licensed football video game business.




The partnership, which will commence with the publishing of Electronic Arts' Madden game next August, eliminates the competitive battle EA endured this year with ESPN's NFL 2K5 game, a joint venture between Sega and Take-Two Interactive. Without the use of team and player names, generic games have struggled for survival in the current environment.


Before this year, EA's Madden franchise -- which the company has sold more than 40 million copies of since its debut in 1989 -- previously dominated the football game marketplace. Bit players, including Midway, 989 Sports and Microsoft, dropped out of the licensed football game business this year.


But the Madden 2005 game was seriously challenged by NFL 2K5, thanks to good reviews and a pricing war. NFL 2K5 was available in stores in August for $19.95. For three months, the Madden game was priced at $49.95, until the company finally relented on Nov. 8 and lowered it by $20.


"We considered a whole variety of factors in making this decision," said Gene Goldberg, the NFL's vice president of consumer products. "We chose EA based on game quality, marketing ability and track record."


As part of the deal, EA will have access to NFL resources, including video, audio and music scores from NFL Films. The partnership pertains to every aspect of gaming, including content for hand-held games, personal computers and cell phones.


Goldberg said he's not concerned that the monopoly on the business will cause EA to relax the year-to-year innovations that have been pushed by recent competition. Though financial terms of the deal are not known, Goldberg said there is "a lot of self-imposed pressure to improve the product to make it stand out in a robust and diverse marketplace."


Sports video games accounted for more than 20 percent ($1.2 billion) of the $5.8 billion video game market last year, according to the NPD Group, a market tracking firm.


EA spokesman Trudy Muller said that the deal is not a financial risk for the company.


"We believe this is a good investment for us, as well as the league and the players," Muller said. "We know we have a responsibility to our fans to continue to make the best game. We have plenty of competition with other games in the marketplace."


Electronic Arts also has exclusive deals with NASCAR, FIFA and the PGA Tour.


"This exclusive relationship will maximize the value of NFL players through EA's continued commitment to bring fans closer to the game," said Gene Upshaw, executive director of the NFLPA and chairman of Players Inc., the organization's licensing body.


In a statement, Take-Two spokesman Ed Nebb disagreed.


"We believe that the decisions of the National Football League and Players Inc. to grant an exclusive license for videogames do a tremendous disservice to the consumers and sports fans whose funds ultimately support the NFL, by limiting their choices, curbing creativity and almost certainly leading to higher game prices," Nebb said. The game was "not a material contributor" to the company's profitability, "nor was it expected to be," Nebb said.


An ESPN spokesman said the company will evaluate the impact that the deal has on the company's licensing business.


The EA deal continues an unprecedented business year for the league. In January, the NFL signed Visa to a six-year deal worth $400 million. In February, Gatorade ponied up $500 million for the right to be called the official sports drink of the league for the next eight years. And PepsiCo signed a contract worth $560 million to use the NFL shield on its Pepsi, Frito Lay and Tropicana products in March.

Looks like the price of Madden won't go down to compete...but....they did eliminate the competion...

[cashpath]

This opens up a whole new realm of posibilities in the madden game

so next year. there will only be 1 NFL football game ont he market? you know what that means? Madden could be $80 a game, and people will have to buy it. Not good. Do I think it will happen.....no, but it could.

[qb8stunner]

I think this is good news. EA Sports will have more ideas to work with, making the game far more in depth. They would be crazy to not add in new features, especially those utilized by former competitors. At least we do not have to worry about Madden leaving the company!

[cashpath]

Originally Posted by Swoosh76

so next year. there will only be 1 NFL football game ont he market? you know what that means? Madden could be $80 a game, and people will have to buy it. Not good. Do I think it will happen.....no, but it could.

See here is the problem.. eveyone decides its bad because EA could do this or that.. what people forget is that if EA gets lazy and doesn;t make a good enough game or makes the game too expensive .. we can always just keep playing last years game.. And that wouldn;t be good for EA after all the money they just gave to the NFL..

Trust me Next years Madden will blow the doors off once again and it will be as always $50

And uh ... madden 2007... don;t even get me started :big_worsh

[Ghs]

This is great news for the Madden franchise but bad news for the ESPN franchise. If EA has excclusive rights to the NFL, PGA, Nascar, and Fifa and I'm ESPN, I'm goin after an exclusive contract w/ the MLB and the NBA. But that's me and neither here nor there.

EA will have access to NFL resources, including video, audio and music scores from NFL Films.

Looks like they may be one step ahead of us on that one.

That's great news. I personally don't like Sega's 2K5.

At first I thought this was great news, but I'm not sure. Competition is usually a good thing. We'll just have to see what direction EA and Madden takes. They have never let me down before, so hopefully that won't change.

What I'm hoping is that they'll want to get all those 2k5 fans converted to Madden fans by greatly improving Madden, including some of the aspects that those gamers loved about the Sega/ESPN series. I hope they do this rather than be glad they eliminated the competition and sit and be happy that they are going to increase their profit somewhat rather than get all those Sega fans buying the game. Hopefully that all makes sense.

Like I said though, Madden has never let me down...I hope that doesn't change.

I hope you are right mboss, they better not lay down on us, but they probably want to make the game more exciting for us, althought they have no competition (I don't think they really had any anyways). I doubt they will turn it into a monopoly and sky rocket the price, that is when everyone should boycott madden! I can not wait until the Madden 06' release!!

[cashpath]

Ok I will say this again.. If they don't make the game better we won't buy it.. If we don't buy it they don't make $$ Then how does that outweight what they gave to the NFL? It won't....

Trust in EA the game will be better.

[fearme504]

this is pimp this is just going to make madden that much better

I agree with cash. If we don't like the game, we won't buy it. EA isn't going to want to lose all that money anyways, so they're going to make a good product. Hopefully though, they won't raise the price to high.

[fearme504]

WOW something to add to that... ecspecially the bold parts

Only Game in Town

EA secures exclusive rights to NFL video games.

December 13, 2004 - Just when you thought ESPN Videogames was catching up, in one move, they've never been farther behind. Electronic Arts announced today an exclusive licensing agreement with the National Football League and Players Inc. to develop, publish, and distribute interactive football games. These agreements give EA the exclusive rights to the NFL teams, stadiums, and players for use in its football video games for the next five years.


You read that right…exclusive rights to the NFL teams, stadiums, and players.

Meaning no ESPN NFL 2K6, no more NFL GameDay, and bye-bye NFL Blitz. All football fans will be left with are Madden, NFL Street, and a new unannounced football management game that is in the works from, you guessed it, EA Sports.

"All of our data shows that there is a huge market for manager-style games," said Jeff Brown, Director of Corporate Communications for Electronic Arts, "and you could see a new type of football game from EA."

The agreement also provides the opportunity for new games and for EA to access both NFL Films and the NFL Network for use in the games.

"We are pleased to expand our agreement with Electronic Arts, the leading video game manufacturer and a valued NFL partner," said NFL Commissioner Paul Tagliabue. "We look forward to working with EA to continue to enhance the quality of NFL video games that our fans have enjoyed for many years."

"For more than a decade, EA has produced the most authentic football product for fans of the game" said Players Inc. Chairman Gene Upshaw. "This exclusive relationship will maximize the value of NFL players through EA's continued commitment to bring fans closer to the game."

"We are excited about the opportunity to further enhance our relationship with the NFL and Players Inc." said Larry Probst, Chairman and CEO of Electronic Arts. "The five-year agreements will usher NFL fans through the console technology transition with new ideas and innovative game play experiences."

The agreement covers consoles, PC, and handheld systems, as well as console online features. The agreement does not include other games available on the Internet or wireless devices, including cellular phones.

"We (EA) have proposed exclusivity several times in the past, but this year, in the spring the NFL had an off-site meeting, and they decided to consider bids for exclusivity," Brown told IGN in an exclusive interview. "Several bids were submitted but they accepted EA's. I cannot tell you how much this cost, but exclusivity is expensive, we are paying a premium. It wasn't cheap. I can tell you this, though, all parties all happy with this agreement, and Wall Street seems happy with it too."

Brown continued: "Look at what else EA has done, look at FIFA, PGA Golf Tour and NASCAR, we have exclusivity rights for all those licenses as well."

"The reason that you're noticing a certain vagueness to the language in the press release is because the license deals do not include smaller games such as Atari's Backyard Football; it's not subject to this agreement due to their numbers. And any wireless game or cell phone game is not part of the deal either."

Also not part of the deal are, obviously, non-licensed football games. The first company to come forward to IGN with such a game is Midway, makers of classic sports titles like NFL Blitz and NBA Jam.

Midway has hired the writer of the show "Playmakers" to develop a new title, Blitz: Playmakers. The game will feature everything the NFL hated about the TV show, including drug use, and off-the-field habits the NFL likes to pretend never happens.

According to an interview earlier this year with Street & Smith's Sports Business Journal, an NFL spokesperson confirmed that they were through working with Midway: "Midway has been quietly dropped in a 'mutual decision' as an NFL video game licensee after years of controversy over the level of violence in its NFL Blitz game."

When IGN contacted Midway about the rumored Blitz: Playmakers, a spokesperson confirmed the game's existence and told us: "Enough of the 'No Fun League'…it's now time to talk about and prepare for the game the NFL wouldn't let anyone make…Blitz the way it should be played."


Whether or not ESPN, 989, and Microsoft follow Midway's lead and develop football games without the license remains to be seen.

On a scarier note for these same publishers, rumors are already circulating that EA is attempting to negotiate similar deals with the NBA and Major League Baseball. When IGN contacted Trudy Muller, spokesperson for Electronic Arts about these rumors, she told us: "We cannot speculate at this time about any further plans these other leagues may have."

An ominous sign for sports game publishers everywhere to say the least.

Check back to IGN Sports for the latest on this genre-shattering deal.

oh and this is from the ign page for that Playmakers Game

=Blitzlaymakers]The series known as NFL Blitz pushes on without the NFL license into an all-new realm of dramatic and intense football, as the writer of the ESPN TV show, Playmakers brings his view of the violent and ethically compromising sport to the videogame realm. Hits can be death, training can be chemical, and the sport will never be the same.

oh yah credit to IGN for all that

Sounds like Blitz-Playmakers will be the GTA of football games...but that's not going to satisfy traditional gamers like most of us here. People may be more inclined to buy that one and Madden, however.

I wonder if Sega is going to keep releasing football games...especially after sacrificing this year by trying to gain a fan base with the low price and whatnot.

[phatboyty]

i would probally buy the blitz one too if id has any graphics