A very good friend of mine is a business professor. He has very little interest in videogames, but he did read about the deal and knew that I did like gaming. Here's his latest email to me:
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The market always figures out a way.
Here's my solution: Who the hell needs licensing rights. I go buy the
best game and let the geeks upload the information on their websites
updated annually based on some algorith of last year's stats. I go to
that site download the info, etc. It will create stronger communities
that may ultimately render liscensing agreements like this obsolete.
If I'm a computer geek that is how I f$ck EA, the NFL, etc.
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Pretty much what I said yesterday.
Let's think about what we want from a developer. Do we here, as relatively hardcore football gamers, really want or need someone to knock EA from its perch? While that would be nice, I don't see that as a goal at all.
What we need is someone to deliver the best quality game and sell enough copies to keep making it better. So for those of you naysaying the idea of an open source or license-less game on the basis of potential sales need to think about that.
A company making a game without an NFL license may not be able to take on EA directly, but *may* be able to sell enough copies to keep itself afloat, profitable and growing, especially in light of the money it's saving by not having to pay license fees etc.
EA now owns all things NFLPA
Moderators: Bill_Abner, ScoopBrady
The anti-trust treatise says about what I figured. It could be a violation, it could not be 
It's unlikely that Sega/VC would want to pursue this because it is WILDLY expensive to prosecute a private action in anti-trust. It could, but I can't imagine that they would see it as cost-effective given the fact that the liklihood of success is mixed.
Anti-trust actions may also be brought by the state attorneys general or the U.S. Justice Department, although they are traditionally less active in Republican administrations. Again, they may not see much use in prosecuting if EA is close to the line here. They will only prosecute in cut and dried cases or when their is significant political capital to reap.
Now, if VC employed a huge number of people (aka "voters") in some state with an opportunistic AG (cough NY cough) then we could see some fireworks.
It's unlikely that Sega/VC would want to pursue this because it is WILDLY expensive to prosecute a private action in anti-trust. It could, but I can't imagine that they would see it as cost-effective given the fact that the liklihood of success is mixed. Anti-trust actions may also be brought by the state attorneys general or the U.S. Justice Department, although they are traditionally less active in Republican administrations. Again, they may not see much use in prosecuting if EA is close to the line here. They will only prosecute in cut and dried cases or when their is significant political capital to reap.
Now, if VC employed a huge number of people (aka "voters") in some state with an opportunistic AG (cough NY cough) then we could see some fireworks.
XBL Gamertag: RobVarak
"Ok I'm an elitist, but I have a healthy respect for people who don't measure up." --Aaron Sorkin
"Ok I'm an elitist, but I have a healthy respect for people who don't measure up." --Aaron Sorkin
Jared, it also could be that Sega didn't think anyone would actually buy the license. The NFL surely asked for a king's ransom (the rumor earlier was $1 billion), and Sega may have figured not even EA would touch that sum.Jared wrote:First, the law posts are more there to see IF SEGA/VC can and/or will pursue some legal action. I'm not suggesting any kind of gamer-led lawsuit, because it will almost assuredly be fruitless.
Secondly, the IGN report stated that the NFL came to the different gaming companies with the offer of an exclusive license. If true, then they probably came to Sega/Take Two with that offer as well. However, it seems like the Sega/VC people are shocked by this move. What happened with Sega/VC? Did they even get a chance to bid for the exclusive license? Did someone high up in Sega that handles procuring licenses keep this hush hush and not tell the VC team? You'd think that if the people at VC knew they were gonna lose the license, they'd already be preparing for it with changes...but it seems like they were all going on with business as usual....there've been no rumors coming out from there AT ALL regarding something this big. And the whole SEGA/VC sales strategy seemed to be predicated on having the NFL license for a while.
Either EA is lying about multiple companies getting a chance at the exclusive license, or the chance at an NFL license was lost high up at Sega/Take Two and they didn't communicate it to VC (or the rank and file at VC) until the press release was announced. Or I could be completely wrong....but something doesn't seem to add up here.
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pk500
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The CNN gaming columnist reported today that the deal was worth slightly more than $300 million over the term of the contract, according to sources.
That less than a bil, but there's no way Sega could afford $300 million over five years.
Take care,
PK
That less than a bil, but there's no way Sega could afford $300 million over five years.
Take care,
PK
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XBL Gamertag: pk4425
"First on the throttle, last on the brakes." - @MotoGP Twitter signature
XBL Gamertag: pk4425
http://money.cnn.com/2004/12/14/comment ... g/?cnn=yes
What's so weird is that SEGA/Take Two's strategy seemed to be predicated on having the NFL license for a while and competing with EA starting with a loss leader strategy and then raising the price once they've developed a stable fan base. Why would they undertake this kind of strategy if they knew the NFL was taking bids for an exclusive license?
If Take Two gets the exclusive license, then there's no reason to go $19.99 this year (or ever) because they're the only game in town. If Take Two knows they're losing the license, then why bother starting an aggressive strategy to compete with EA over the long term when they'll be completely crippled by the impending loss of the license.
I'm probably missing something obvious....so feel free to enlighten me people.
So Take Two did bid for it. Which means that VC should have been preparing for this to happen, and should already have a plan in place. (I think.)It would, in fact, be the NFL's fault should that come to pass. Despite conspiracy theories that have sprouted up on various message boards, the league put out a call for bids this spring for the exclusive license. Among those bidders was Take Two.
While the company would not go into specifics about its bid, spokesperson Ed Nebb said the company was not surprised by Monday's announcement.
What's so weird is that SEGA/Take Two's strategy seemed to be predicated on having the NFL license for a while and competing with EA starting with a loss leader strategy and then raising the price once they've developed a stable fan base. Why would they undertake this kind of strategy if they knew the NFL was taking bids for an exclusive license?
If Take Two gets the exclusive license, then there's no reason to go $19.99 this year (or ever) because they're the only game in town. If Take Two knows they're losing the license, then why bother starting an aggressive strategy to compete with EA over the long term when they'll be completely crippled by the impending loss of the license.
I'm probably missing something obvious....so feel free to enlighten me people.
EA, honestly, may not be able to afford it either. That's 60 million per year to pay for ONE game. Yes, they may kill their competitors, but it's not like they were losing that much market share. With Sega rumored to raise prices again, I think their forray into that market share was going to level off.pk500 wrote:The CNN gaming columnist reported today that the deal was worth slightly more than $300 million over the term of the contract, according to sources.
That less than a bil, but there's no way Sega could afford $300 million over five years.
Take care,
PK
I'm guessing EA were nervous about another GameDay situation on the next gen systems. But it seems like a steep price to pay when they were already the leader.
Brando70 wrote:EA, honestly, may not be able to afford it either. That's 60 million per year to pay for ONE game. Yes, they may kill their competitors, but it's not like they were losing that much market share. With Sega rumored to raise prices again, I think their forray into that market share was going to level off.pk500 wrote:The CNN gaming columnist reported today that the deal was worth slightly more than $300 million over the term of the contract, according to sources.
That less than a bil, but there's no way Sega could afford $300 million over five years.
Take care,
PK
I'm guessing EA were nervous about another GameDay situation on the next gen systems. But it seems like a steep price to pay when they were already the leader.
Let's do some math on this one.
Say the game RETAILS for $75.00
They expect 5,000,000 sales across the board (roughly what it will do this year and last year)
Since they mark up the game and sell to retail in most cases let's guess that they do so for $50.
The cost to develop the game (everything BUT the $60 million for each year to the NFL - that comes last) So I round down to $30 profit on each game sold (before the NFL deal) to cover all the costs - employees, dev time, equipment, etc. This is just a guess and w/o having the CIO of EA here that is all we can ever do.
So 5,000,000 sales at $30 a pop
$150,000,000
Subtract
$60,000,000 (NFL Deal)
leaves
$90,000,000 profit so they can make a sequel to Catwoman.
Play with the numbers all you want and even at $49.99 (based on a $20 profit per game) they are still making plenty of money.
EA could do this deal at that price because they have the customer base to afford it. Something Sega did not even with the sales totals from this year because it was priced to sell at $19.99.
[url=http://sites.google.com/site/bmdsooner/]My place for games![/url]
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ScoopBrady
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Here are my thoughts on this subject that I posted at Scoop on Sports:
The NFL and NFLPA sold the exclusive rights to use their likenesses but who is really paying for it?
It is truly a sad day in sports videogame history. Yesterday Electronic Arts signed a contract with the NFL and the NFL Players Association that allows them exclusive use of their license. No other company can make a football game using NFL team names, logos, stadiums, or players. Midway, 989 Sports, and Sega Sports are now forced to stop making football games or make them without the NFL and NFLPA licenses. It is being reported that Electronic Arts spent $300 million dollars for this privilege but it’s the gamers that are really going to pay. Unfortunately they will pay in more than one way.
The first big blow to the gaming community comes in the form of competition. With no other NFL licensed game to compete with EA Sports has no competition. Competition is a good thing for gamers. Competition is what drives the game makers to better their product or to advance their product. We’ve all seen one football game have a feature that was mimicked by the other football games the very next year. That’s the type of thing that competition breeds. With no other game developers making football games the number of features or gameplay advancements will decrease as a result of not having as many developers coming up with ideas to advance the genre.
A lack of competition will also likely increase the price of the product since there are no alternatives. If you want to play a videogame with NFL teams and players you will have to buy EA Sports game. I’m sure EA Sports will think you’d be willing to spend an extra $10 - $25 for that privilege. So when Madden NFL 2006 comes out next year at $59.99 instead of $49.99 you will know where that extra money is going. They definitely won’t swallow the cost of the licensing they paid $300 million for. They sell roughly 5 million copies of Madden each year across all platforms. An extra $10 per copy comes to $250 million over 5 years leaving only $50 million dollars needed to pay the rest of the NFL and NFLPA’s licensing fees. And that $50 million dollars will also come from the consumers’ pocket.
That’s right, we’re going to foot that bill too. For years EA has been looking for a way to make money with online gaming. The Sims Online failed miserably as did their online racer Motor City Online. Both games charged to play online but both failed. EA misjudged how many people would be willing to pay to play the Sims online but they finally found their online money train; NFL football. So, now that you’ve paid $59.99 for your brand new copy of Madden NFL 2006 you’re going to be expected to pay additional money to play it online. There will probably be different plans I’m sure. For instance, you might only have to pay $4.99 a year to just play head to head games but you will probably be expected to pay $9.99 - $14.99 to be able to join leagues. Over a 5-year period they will easily make more than $50 million especially if they have the exclusive rights for fantasy football. Yahoo’s free leagues will probably be forced into retirement and pay leagues such as ESPN’s will also have to retire to make way for the EA juggernaut.
That is how gamers are going to pay for this deal. This deal was so good for EA all they had to do was come up with the initial $300 million. Now the gamers will pay them that $300 million back over the next five years and then some. This is not a good day for gamers at all. Let’s just hope that the football games are the only genre that will be affected by this because there’s the potential to make a mess of things across the whole videogame industry. The only way we gamers can fight back would be to not buy an officially licensed NFL game for 5 years and support the hell out of any non-licensed games to show the NFL and Electronic Arts that we will not stand for this type of practice. But we all know that it won’t happen. Sure, some will boycott for a while, hell maybe even the whole 5 years, but in the end EA Sports will still sell their 5 million copies and the gamers will foot the bill.
The NFL and NFLPA sold the exclusive rights to use their likenesses but who is really paying for it?
It is truly a sad day in sports videogame history. Yesterday Electronic Arts signed a contract with the NFL and the NFL Players Association that allows them exclusive use of their license. No other company can make a football game using NFL team names, logos, stadiums, or players. Midway, 989 Sports, and Sega Sports are now forced to stop making football games or make them without the NFL and NFLPA licenses. It is being reported that Electronic Arts spent $300 million dollars for this privilege but it’s the gamers that are really going to pay. Unfortunately they will pay in more than one way.
The first big blow to the gaming community comes in the form of competition. With no other NFL licensed game to compete with EA Sports has no competition. Competition is a good thing for gamers. Competition is what drives the game makers to better their product or to advance their product. We’ve all seen one football game have a feature that was mimicked by the other football games the very next year. That’s the type of thing that competition breeds. With no other game developers making football games the number of features or gameplay advancements will decrease as a result of not having as many developers coming up with ideas to advance the genre.
A lack of competition will also likely increase the price of the product since there are no alternatives. If you want to play a videogame with NFL teams and players you will have to buy EA Sports game. I’m sure EA Sports will think you’d be willing to spend an extra $10 - $25 for that privilege. So when Madden NFL 2006 comes out next year at $59.99 instead of $49.99 you will know where that extra money is going. They definitely won’t swallow the cost of the licensing they paid $300 million for. They sell roughly 5 million copies of Madden each year across all platforms. An extra $10 per copy comes to $250 million over 5 years leaving only $50 million dollars needed to pay the rest of the NFL and NFLPA’s licensing fees. And that $50 million dollars will also come from the consumers’ pocket.
That’s right, we’re going to foot that bill too. For years EA has been looking for a way to make money with online gaming. The Sims Online failed miserably as did their online racer Motor City Online. Both games charged to play online but both failed. EA misjudged how many people would be willing to pay to play the Sims online but they finally found their online money train; NFL football. So, now that you’ve paid $59.99 for your brand new copy of Madden NFL 2006 you’re going to be expected to pay additional money to play it online. There will probably be different plans I’m sure. For instance, you might only have to pay $4.99 a year to just play head to head games but you will probably be expected to pay $9.99 - $14.99 to be able to join leagues. Over a 5-year period they will easily make more than $50 million especially if they have the exclusive rights for fantasy football. Yahoo’s free leagues will probably be forced into retirement and pay leagues such as ESPN’s will also have to retire to make way for the EA juggernaut.
That is how gamers are going to pay for this deal. This deal was so good for EA all they had to do was come up with the initial $300 million. Now the gamers will pay them that $300 million back over the next five years and then some. This is not a good day for gamers at all. Let’s just hope that the football games are the only genre that will be affected by this because there’s the potential to make a mess of things across the whole videogame industry. The only way we gamers can fight back would be to not buy an officially licensed NFL game for 5 years and support the hell out of any non-licensed games to show the NFL and Electronic Arts that we will not stand for this type of practice. But we all know that it won’t happen. Sure, some will boycott for a while, hell maybe even the whole 5 years, but in the end EA Sports will still sell their 5 million copies and the gamers will foot the bill.
I am a patient boy.
I wait, I wait, I wait, I wait.
My time is water down a drain.
I wait, I wait, I wait, I wait.
My time is water down a drain.
I emailed all 3 last night, and have not heard anything back. I've felt for awhile now that EA doesn't listen to its customers, so I guess it shouldn't surprise me that they won't start now.JRod wrote:I would be interested in hearing if anyone has recieved anything back from the people you emailed.
Just wanted to point out my new avatar which shows my support of an EA boycot. I'd put an NFL logo in their too but i pretty much already boycot the NFL since I almost never watch it. I fear that this deal could have a negative impact on all the sega sports games. Even if the NFL games don't interest me i still have reason to be concerned about the future of the hockey, baseball, and basketball series.
You guys don't have to see the snake and rabbit avatar, at least for the time being. I'm sure many are pleased.
You guys don't have to see the snake and rabbit avatar, at least for the time being. I'm sure many are pleased.
"Be tolerant of those who describe a sporting moment as their best ever. We do not lack imagination, nor have we had sad and barren lives; it is just that real life is paler, duller, and contains less potential for unexpected delirium." -Nick Hornby
Just got back in town late last night and decided to fire up the comp, low and behold I see this thread and almost started crying.
For the next 5 years I'm stuck with only Madden(not a bad choice), what made me weep is that I'm more into hockey games and if I got stuck with only NHL games by EA, I'm not sure what I would do.
For the next 5 years I'm stuck with only Madden(not a bad choice), what made me weep is that I'm more into hockey games and if I got stuck with only NHL games by EA, I'm not sure what I would do.