Madden NFL 11 News Post

Judge Certifies Class-Action Football Game Pricing Lawsuit Against EA

09:48 PM - December 22, 2010 by Steve_OS

Gamasutra has some new info on the lawsuit.

Quote:


	"A U.S. district judge has certified a class-action anti-trust lawsuit against Electronic Arts that alleges the company illegally inflated prices for its football titles after attaining exclusive rights to league licenses. In a 67-page complaint [PDF], the legal team specifically cites the 2004 pricing battle between Sega and Take-Two's NFL2K5, which retailed for just $19.95, and EA's Madden NFL 2005, which was lowered from a $49.95 asking price to $29.95 in November of that year. A month after this price decrease, EA signed its exclusive licensing deal with the NFL, following with similar deals for the NCAA and Arena Football leagues in later months. The next year's Madden NFL 2006 faced no competition in the football game market at its usual $49.95 price point."

Gamespot chimes in as well.

Quote:


	"We believe EA forced consumers to pay an artificial premium on Madden NFL video games" Berman continued. "We intend to prove that EA could inflate prices on their sports titles because these exclusive licenses restrained trade and competition for interactive sports software."

What do you think happens, out of all this?

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Member Comments

# 21 khaliib @ 12/23/10 03:22 AM

Tyrant8RDFL;
What your forgetting is that the NFL ask for bidders to own the rights for the NFL license. Thats a huge piece of information. EA did not go to them. The NFL made it clear. You want to make a football game then you have to pay us!!!

I'm not forgetting anything.

The article spoke of a Class Action being brought agains "EA Sports" for possible violation of "AntiTrust Law(s)".

AntiTrust being the key word.

If EA's Exclusive deal is found to break any AntiTrust Laws, the NFL could/would be included as a co-partner of such agreement that violated such law(s).
EA is easier to take head on than the NFL. NFL pockets are much deeper than EA.

My point is that this EA's exclusive deal came right at the "Boom" of Next-Gen consoles which pricing was increased by $30 from the selling price of the prior year as the only football game on an Open Market.

AntiTrust Laws are established to prevent a certain market from being cornered, then having Exclusive at-will pricing on an "Open" market.

The issue with an Exclusive agreement is that it contradicts the fairness of trade on an Open Market by not allowing others the opportunity to develope a generalized product.

If this practice was accepted.
Only one company would be able sell Christmas Trees for $200 each.
Only one company could make hamburgers for $25 each
One pizza maker selling for $40 each etc....

AntiTrust is established to prevent such practices which would allow price gauging the consumer without an alternative.

# 22 Dazraz @ 12/23/10 03:32 AM

In regards to the pricing I don't really think an argument exists. There is a large cost involved in developing games & at the end of the day Madden retails at the standard RRP's for titles on their respective platforms.

That said they is certainly a case to argue against the fairness of exclusive license agreements. Consumers want an NFL licensed product without doubt. But, they want a quality product. This is where exclusivity poses the problem. It is clear to everyone that EA are guilty of letting the Madden franchise become stale with the lack of innovation in the wake of signing the exclusive license. Madden 05 (the last release before said agreement) was the best Madden. Since then we've had only small changes in the game with a heap of rehashed ideas.

As i said, in regards to pricing I don't see a case here. In regards to the interests of consumers there certainly is one. Exclusivity deals need to be quashed. Competition in any industry leads to increased effort & more creative ideas. That can only benefit the end user.

Look how EA turned around their NHL & FIFA titles in the wake of competition from 2K & Konami. Would NBA 2K be the game it is today if 2K had exclusive NBA rights?

# 23 ven0m43 @ 12/23/10 04:38 AM

A lot of people were/are missing the point that this has nothing to do with current gen games. To me, it is about how EA sold their games at a certain price and then changed it the next year because they are the only ones that can make an nfl game.

For example it would be like 2k made an nfl game and sold it for 40 on the current gen, so EA made their game $40 to compete. The next year EA buys the rights and now 2k cant make an nfl game, so EA makes their game $60.

# 24 He_Shoots_He_Scores @ 12/23/10 04:47 AM

Quote:

Originally Posted by ven0m43


	A lot of people were/are missing the point that this has nothing to do with current gen games. To me, it is about how EA sold their games at a certain price and then changed it the next year because they are the only ones that can make an nfl game. For example it would be like 2k made an nfl game and sold it for 40 on the current gen, so EA made their game $40 to compete. The next year EA buys the rights and now 2k cant make an nfl game, so EA makes their game $60.

Thank you, you are one of the few who have the education to understand the argument. I swear, some people refuse to read the thread before they post and fail to see the argument when it has been clearly explained. Yes, i hope ea lose the law suit to Activision and the one Class action law suit. I would love bobby kotick to clean house on EA. EA is greedy and releases bugged games under full knowledge and i have been burned one too many times.

# 25 CreatineKasey @ 12/23/10 05:33 AM

I'm not seeing the validity of this one. If you look in a vacuum at Madden prices and the immediate effect of the exclusive license back in 2006, you can see something. If you look at all of gaming, you see nothing. Maybe they should sue EA for false advertising on that Madden 2006 commercial for the 360! That freaking commercial motivated me to buy that stupid game. As we all know, it wasn't even relatively close visually and animation wise.

# 26 Hova57 @ 12/23/10 08:40 AM

I find it funny this happens as the contracts for NCAA and Madden are coming to the last years of exclusitivity. Its all rolling down hill for any exclusive titles. From the NFL down to anyone signing with them. I understand why the NFL and NCAA did it to avoid a water down version of their organizations and to get their money from one source, but I think Ncaa and Nfl will have multiple licenses again. EA tried to hit all the type of markets with the NFL and they didn't work out ie Blitz type and simulation even down to madden ultimate team. EA spread themselves thin with trying to hit these markets to make money off the license but ended up cutting all. Even with NCAA they cut there Basketball because the cost exceeded revenue.

# 27 UNC_Pete @ 12/23/10 08:46 AM

I hope this ends up tipping the iceberg and hinders the chance of a license extension.

# 28 sithlord06 @ 12/23/10 08:51 AM

I love it! Anything to get EA running from this NFL exclusive license in 2012 or 2013. I dont think they should be the only NFL licensed football game in the market. Buyers should have the right to choose from various games that come out on the market, it only increases the quality of the products. NFL2K5 was arguably the best game of all time. NFL Fever was a decent football game that came out and Microsoft had something there but they also got squeezed by EA. Licensing has to go away so the consumer benefits from better quality and prices.

# 29 BlackRome @ 12/23/10 09:31 AM

Quote:

Originally Posted by mWolfe


	I see what they are getting at but where is the real suit because exclusive happen all the time and price what would bring in revenue to offset the cost, everybody in the business does that. This lawsuit does not help bring in competition, nor should EA pay back anybody because it is a choice to buy something you want but do not need. If you don't want to buy Madden or NCAA then don't. I bought NCAA 11 but not Madden 11 because I have Madden 08 on the PC to pass my time until certain things in Madden change for the better. This lawsuit reminds of the other lawsuit that that guy who is suing an RPG Game maker for a million dollars cause he cant function properly in life because he is to addicted to the game. I don't know about y'all but I don't see this boding well for EA if it goes to trial, because everyone always wants to rip apart big money making businesses. Perfect example of this was the old lady that spilt her coffee because she put it between her legs. I know one thing, I am definitely smart enough never to put any thing hot that close to my, well you know.

Exclusive deals stiff competition. Those exclusive deals let Nike put Starter out of business. Starter was beating the snot out of Nike and Reebok when it came to apparel. So once Nike got the exclusive deal it basically killed Starter. They did the same thing in college sports. Nike supplied all of North Carolinas apparel but I still could rock a starter jacket with North Carolina on it if I wanted to. I actually had a UCLA starter. Reebok now owns UCLA's apparel line. It sucks.

This ruling could be the end of exclusive deals. Which would be a good thing for consumers. Those contracts should be based on a license fee and then let the company who makes the best product win. That's called competition.

If companies are paying millions in exclusive fees who do you think has to pay for it. The consumer.

If there were 4 companies making hats I'm sure they wouldn't all be charging 25 dollars for a baseball cap.

They would be forced to compete and the company with the inferior product would lower the price. Once EA was forced to compete they just closed the door with the exclusive contract.

I want choice. I haven't brought any NFL apparel in years since Reebok had the contract. Their clothes suck. I still have hung in my basement the Jerseys Nike made for the Cowboys. The NFL used to allow individual teams to have their jerseys supplied by the company of their choice.

Tyrant8RDFL: What your forgetting is that the contracts didn't used to work that way. Far as satellite TV the only reason to buy directtv is for the the NFL package. I had directtv for years with the package. Got rid of it once I found a way to watch the games I wanted to on the internet. For free . Directv is inferior to cable and especially FIOS. That exclusive deal is forcing customers to buy an inferior product.

Just like forcing me to buy Reebok when I would rather buy Nike or Starter products.

I guess your OK with being forced to buy inferior products.

# 30 Pete1210 @ 12/23/10 09:48 AM

Since $60 is the normal price for nearly all PS3/360 new releases, this argument seems like a loser to me.

# 31 youALREADYknow @ 12/23/10 10:02 AM

This is a very silly lawsuit, but anything that places the spotlight on the monopolistic practices of EA and the lack of competition in football gaming is a good thing for us all.

# 32 adembroski @ 12/23/10 10:02 AM

The legal truth: EA owns the Madden franchise. Nobody has a right to purchase anything for any price that the owner does not want to sell. EA sells Madden at the same price as other games are sold. This case has no merit.

Lawsuits like this only serve to cost developers money, which in turn will be passed onto us. We likely wont see the price of games go up because of this lawsuit, but were this to become the norm, it would. If anybody is to blame for the cost of games remaining at $60 dollars, it's GameStop, who screws both the consumers and the publishers with their used game market.

Don't get me wrong; GameStop is absolutely in the right expanding their own market through used games, and consumers have a right to resell their games. The fact that publishers don't a cent from those sales, however, means that publishers have to keep prices where they are or lose revenue.

# 33 patsfan188 @ 12/23/10 10:29 AM

Anything for a cheaper game, EA doesn't care about us then I don't care about EA.

# 34 Critical Kills @ 12/23/10 10:36 AM

Look I want competition with Madden just as bad as anyone here but the fact that 2K underpriced their game (and let's face it ESPN2K5 was severely underpriced for one reason, to get a foothold in the market, not because that was the normal price going forward) should not mean EA has to underprice their football games from then on out. EA charges the going rate for their games the same as anyone.

This would carry much more weight if 2K Sports sold NBA 2K11 and all of their other sports games for $19.99 since NFL2K5 was out but we all know that's not the case.

# 35 RaychelSnr @ 12/23/10 11:06 AM

Quote:

Originally Posted by ODogg


	Look I want competition with Madden just as bad as anyone here but the fact that 2K underpriced their game (and let's face it ESPN2K5 was severely underpriced for one reason, to get a foothold in the market, not because that was the normal price going forward) should not mean EA has to underprice their football games from then on out. EA charges the going rate for their games the same as anyone. This would carry much more weight if 2K Sports sold NBA 2K11 and all of their other sports games for $19.99 since NFL2K5 was out but we all know that's not the case.

I'll have an article on this in a few hours discussing the suit, it's claims and what it means. A preview goes something like this: anyone with a grasp on the facts and who isn't fraudulently twisting facts will see this case has absolutely zero chance. The core claim of the case is just simply a misrepresentation of the facts.

# 36 RaychelSnr @ 12/23/10 11:06 AM

Quote:

Originally Posted by ODogg


	Look I want competition with Madden just as bad as anyone here but the fact that 2K underpriced their game (and let's face it ESPN2K5 was severely underpriced for one reason, to get a foothold in the market, not because that was the normal price going forward) should not mean EA has to underprice their football games from then on out. EA charges the going rate for their games the same as anyone. This would carry much more weight if 2K Sports sold NBA 2K11 and all of their other sports games for $19.99 since NFL2K5 was out but we all know that's not the case.

# 37 Critical Kills @ 12/23/10 11:08 AM

Looking forward to reading that Chris!

# 38 SmashMan @ 12/23/10 11:45 AM

Quote:

Originally Posted by ODogg


	Look I want competition with Madden just as bad as anyone here but the fact that 2K underpriced their game (and let's face it ESPN2K5 was severely underpriced for one reason, to get a foothold in the market, not because that was the normal price going forward) should not mean EA has to underprice their football games from then on out. EA charges the going rate for their games the same as anyone. This would carry much more weight if 2K Sports sold NBA 2K11 and all of their other sports games for $19.99 since NFL2K5 was out but we all know that's not the case.

This pretty much sums up my thoughts too. I don't see why 2K temporarily setting a lower price makes that price the new standard.

I'm also looking forward to Chris' article.

# 39 jmik58 @ 12/23/10 12:07 PM

Quote:

Originally Posted by kng23rich


	It's $60 because every other new game is $60.............

My thoughts as well. Won't they be able to use this argument? The makers of Tomb Raider have exclusive rights to Ms. Croft... aren't they inflating the cost with their monopoly over the rights to her character? For any character?

I could be off, but it sounds similar to me.

# 40 ngreatshark @ 12/23/10 12:20 PM

I think this is frivilous, especially all these years later. The argument I see here is that, Madden did bring the cost of their game down to 29.99, demonstrating that they could sell a football game for that price. But then the following year they sold it for 60. The question being if you sold last years game for 30, why do you have to sell the following game for twice the price, with the only difference being now that you now hold exclusive rights to make NFL games for consoles.

2k didn't do themselves any favors selling their game for 19.99. Their distribution deal with Take-Two And Global Star allowed it to happen, but even though the game sold well enough, I don't think it ended up bringing in alot of revenue. And I don't think a 2K6 would have sold for that price, based off all the other 2k6 games that followed. I don't think it was a long term plan, I think Sega at the time wanted to do something to get a bigger market share of the target audience, they realized how good of a game they had, but they just couldn't get passed the brainwashed masses that were buying a game soley based off a name.

Madden has become synonymous with video game football, nobody was complaining about it's flaws then because all they cared about was "having Madden". So Sega came to the conclusion that if we could at least get people to try our game, at some point the game it will sell itself, and they basically gave the game away. I don't think the NFL was happy with them selling the game for 20 bucks, maybe they get some residual income based on how well the game sells and the profit margin it makes and on that game their had to be close to none. So that might have been what pushed the NFL to see out an excluisve deal in order to prevent something like that from happening again.

On one side it's like a company like Walmart, who drives prices so ridiculously low that the smaller stores can't compete and evenutally end up going out of buisness, though I don't think this could have been 2ks long term plan, because they would have gone under before EA did. But on the other side it's like companies like NIKE and Under Armour, and Northface, who want to dictate what things should be sold for, and for companines who try to undersell or cut prices on their merchanside they attempt to penalize them, which is what it looks like the NFL did in this case.

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