Rather than seeing 2k's struggles since the exclusivity agreement as evidence that EA overreacted by purchasing the license, I've always thought that 2k's struggles with AFP and and other franchises since then is some of the best evidence out there that the deal worked quite well for EA.
This is mostly speculative, but I suspect EA looked at it this way; with 2k football getting bigger, EA faced increased development costs to keep up with the competition plus a likely loss of market share (and possibly significant loss of market share). With the exclusive license, production costs go up, but you can offset that with decreased development costs and guaranteed sales.
Static sales at increased but fixed costs is far more desirable than decreasing sales with increasing and unpredictable costs.
Also, EA might have looked at it from a brand name perspective. They assured the health of their flagship franchise and struck a devastating blow to the developing product line of their sports game competitor (as evidenced above). EA could have very realistically believed that significantly decreased Madden sales and market share would've hurt their brand name and possibly caused sales of their other sports franchises to decrease as well.
Hey EA, how's that NFL Exclusive License treating ya?!
Moderators: Bill_Abner, ScoopBrady
This is why I think Divot is right -- EA really believed that 2k had a shot at getting exclusive NFL rights. I remember all of us talking about the deal when it happened and expressing doubts that the deal would be financially beneficial to EA. But it certainly would have been a disaster to them to lose the NFL license. The last time Madden wasn't licensed was Madden 64 on the N64, and they were outsold by NFL QB Club, which was a piece of used toilet paper concealed in a game cartridge.bdoughty wrote:You do not have to be an economist to figure this one out.
1) Pay A TON more money for license.
2) Sell game for same price you would if you did not have the license.
3) Sell roughly the same amount of games.
= Less profit
Don't get me wrong they have done steps to reduce cost, outside of the license and increase revenue by taking in more ad money. Still I never saw the ends justifying the means. You can't blame the economy for this one. Just a really bad business decision.
Even with increased competition from 2k, EA dominated sales. 2k made big inroads on the XBox but overall sales were still far in Madden's favor. I don't think they had $500 million worth of worries regarding their competition, unless an exclusive deal would spell the end of Madden the way it did the 2k series.
Of course, some folks doubt that the NFL offered the exclusive license, but given how the NFL operates, I think it really did happen the way EA said -- the NFL put the rights up and EA overbid to prevent 2k from winning.
I wouldn't say that would necessarily happen. Volume could potentially increase with a price drop making up the difference.Rodster wrote:I've reading several articles lately where analysts have been suggesting that the $59 price tag of games is too high especially in this economy and needs to come back down to $49.
If that happens expect more game developers and publishers to suffer as a result.
Last night on NPR there was an "economics behaviorialist" on talking about prices and how people typically think in terms of percentage rather than absolutes. His point was that if you were faced with a $1000 price for an item in store A and $1007 in store B, you wouldn't care about the extra $7. But if faced with a $20 price for an item in store A and $27 in store B, you'd go back to store A to buy it. In both cases it's $7, but in the first case it's a 0.7% price increase; in the second case it's a 35% increase.
I know I've bought fewer games for $60 for the 360. I wait for a sale or buy used. But I more often pay retail for Wii games at their lower price point.
Brando70 wrote: This is why I think Divot is right -- EA really believed that 2k had a shot at getting exclusive NFL rights. I remember all of us talking about the deal when it happened and expressing doubts that the deal would be financially beneficial to EA. But it certainly would have been a disaster to them to lose the NFL license. The last time Madden wasn't licensed was Madden 64 on the N64, and they were outsold by NFL QB Club, which was a piece of used toilet paper concealed in a game cartridge.
Even with increased competition from 2k, EA dominated sales. 2k made big inroads on the XBox but overall sales were still far in Madden's favor. I don't think they had $500 million worth of worries regarding their competition, unless an exclusive deal would spell the end of Madden the way it did the 2k series.
Of course, some folks doubt that the NFL offered the exclusive license, but given how the NFL operates, I think it really did happen the way EA said -- the NFL put the rights up and EA overbid to prevent 2k from winning.
EA came out and said that before the NFL came up with this "desire to have one exclusive" they had gone to the NFL asking for it, on multiple occasions.
His name was Jeff Brown and here is the article.
http://sports.ign.com/articles/572/572886p1.html
Here is what he said.
"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.
I have posted this before but it is worth mentioning since there are people who truly think that the NFL was alone in this decision. Reality is that EA knew they could outbid anyone for the license. The NFL made more money and only had to deal with one company. Do you really think that EA would propose an exclusive license (several times) if they honestly thought 2ksports or anyone else had a shot at it?
There was an article today that states that FIFA 09 sold close to 8 million copies worldwide. I don't know if Madden sold that many last year?
I found it:
http://www.edge-online.com/news/fifa%E2 ... 2%80%AC52m
"Brown claimed that FIFA 09 was EA’s biggest selling title of last year, and had enjoyed a sales gain of 4 percent over its predecessor FIFA 08. “In Europe, we estimate it was the number one title across all platforms in the holiday quarter,” says Brown."
I found it:
http://www.edge-online.com/news/fifa%E2 ... 2%80%AC52m
"Brown claimed that FIFA 09 was EA’s biggest selling title of last year, and had enjoyed a sales gain of 4 percent over its predecessor FIFA 08. “In Europe, we estimate it was the number one title across all platforms in the holiday quarter,” says Brown."
There is also the matter of EA having bought exclusive licenses for NCAA, the Arena Football League, NASCAR, and the PGA. Hell, just yesterday EA announced that they've bought the exclusive rights to make videogames "based on the works of Robert Ludlum." I couldn't make this stuff up if I tried. If there's one company who is exclusive happy, it's definitely EA.bdoughty wrote: I have posted this before but it is worth mentioning since there are people who truly think that the NFL was alone in this decision. Reality is that EA knew they could outbid anyone for the license. The NFL made more money and only had to deal with one company. Do you really think that EA would propose an exclusive license (several times) if they honestly thought 2ksports or anyone else had a shot at it?
http://www.techshout.com/gaming/2009/03 ... rt-ludlum/
7.8 million to be exact (regarding Fifa but after the edit you already knew that).Rodster wrote:There was an article today that states that FIFA 09 sold close to 8 million copies worldwide. I don't know if Madden sold that many last year?
As for sales figures (to date - based on vgchartz)
360
Madden 09 - 2.15m
Madden 08 - 2.42m
Madden 07 - 1.89m
PS3
Madden 09 - 1.44m
Madden 08 - .91m
Madden 07 - .48m
PS2
Madden 09 - 1.14m
Madden 08 - 2.19m
Madden 07 - 3.66m
Wii
Madden 09 - .67m
Madden 08 - .95m
Madden 07 - .47m
Combined
Madden 09 - 5.4m
Madden 08 - 6.47m
Madden 07 - 6.5m
To be fair they did it primarily to have the Jason Bourne series, as mentioned in the link. Maybe Jeff Brown's daughter really has a thing for Matt Damon? Daddy please buy this exclusive so I can have him all to myself.GTHobbes wrote: Hell, just yesterday EA announced that they've bought the exclusive rights to make videogames "based on the works of Robert Ludlum." I couldn't make this stuff up if I tried. If there's one company who is exclusive happy, it's definitely EA.
http://www.techshout.com/gaming/2009/03 ... rt-ludlum/
When EA starts making exclusives with Ben Afleck related products, then I will become worried.
I did not know they had proposed it. However, that doesn't change that the NFL opened the license to bidding, from suitors other than EA. I have no idea how EA arrived at their figure for the bid, but I'm assuming they must have thought they had to bid close to a half billion to secure the deal. After all, why would they overbid if they didn't need to?bdoughty wrote:EA came out and said that before the NFL came up with this "desire to have one exclusive" they had gone to the NFL asking for it, on multiple occasions.
His name was Jeff Brown and here is the article.
http://sports.ign.com/articles/572/572886p1.html
Here is what he said.
"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.
I have posted this before but it is worth mentioning since there are people who truly think that the NFL was alone in this decision. Reality is that EA knew they could outbid anyone for the license. The NFL made more money and only had to deal with one company. Do you really think that EA would propose an exclusive license (several times) if they honestly thought 2ksports or anyone else had a shot at it?
Not trying to exonerate EA here -- I hate this deal and the lack of choice it brings. But I am sure they ran projections when coming up with a bid figure, and I don't think they would have made such a high bid without some concern about coming in too low and letting 2k outbid them. That seems very unlikely now knowing Take Two's financial status, but that wasn't as apparent in 2004. Given that TT were willing to sell their product at a deep discount, it's not unreasonable to think they would have considered going into debt in order to grab a license for the biggest sports genre around.
BD, you beat me to it (I was just checking the numbers at vgchartz). If those numbers are to be believed, the DECREASE in Madden sales becomes more pronounced when you add in the PSP sales:bdoughty wrote:7.8 million to be exact (regarding Fifa but after the edit you already knew that).Rodster wrote:There was an article today that states that FIFA 09 sold close to 8 million copies worldwide. I don't know if Madden sold that many last year?
As for sales figures (to date - based on vgchartz)
360
Madden 09 - 2.15m
Madden 08 - 2.42m
Madden 07 - 1.89m
PS3
Madden 09 - 1.44m
Madden 08 - .91m
Madden 07 - .48m
PS2
Madden 09 - 1.14m
Madden 08 - 2.19m
Madden 07 - 3.66m
Wii
Madden 09 - .67m
Madden 08 - .95m
Madden 07 - .47m
Combined
Madden 09 - 5.4m
Madden 08 - 6.47m
Madden 07 - 6.5m
Madden 09 -- 6.08m
Madden 08 -- 7.12m
Madden 07 -- 7.35m
It REALLY tails off when you add in the original XBox sales:
Madden 09 -- 6.18m
Madden 08 -- 7.34m
Madden 07 -- 8.34m
You said before that EA must've been counting on picking up a few more sales back when they made the original NFL agreement. I wonder if they ever thought that their overall sales would actually DECREASE as time went by.
http://www.vgchartz.com/games/index.php?name=madden
This doesn't surprise me. The next-gen versions of the game were very underwhelming and more expensive. The irony is that 09 was quite a bit better than the turds they pooped out from 06-08.bdoughty wrote:7.8 million to be exact (regarding Fifa but after the edit you already knew that).Rodster wrote:There was an article today that states that FIFA 09 sold close to 8 million copies worldwide. I don't know if Madden sold that many last year?
As for sales figures (to date - based on vgchartz)
360
Madden 09 - 2.15m
Madden 08 - 2.42m
Madden 07 - 1.89m
PS3
Madden 09 - 1.44m
Madden 08 - .91m
Madden 07 - .48m
PS2
Madden 09 - 1.14m
Madden 08 - 2.19m
Madden 07 - 3.66m
Wii
Madden 09 - .67m
Madden 08 - .95m
Madden 07 - .47m
Combined
Madden 09 - 5.4m
Madden 08 - 6.47m
Madden 07 - 6.5m
Honestly, if it hadn't been for being able to get Madden and Head Coach in the Collector's Edition, I'm not sure I would have bought Madden this year. In fact, next year I'm considering switching to NCAA unless Madden really makes some strides. I haven't played the college game in a couple of years and would appreciate the change of pace. I can also go back to Front Office Football with roster and schedule updates.
Brando70 wrote: I did not know they had proposed it. However, that doesn't change that the NFL opened the license to bidding, from suitors other than EA. I have no idea how EA arrived at their figure for the bid, but I'm assuming they must have thought they had to bid close to a half billion to secure the deal. After all, why would they overbid if they didn't need to?
Not trying to exonerate EA here -- I hate this deal and the lack of choice it brings. But I am sure they ran projections when coming up with a bid figure, and I don't think they would have made such a high bid without some concern about coming in too low and letting 2k outbid them. That seems very unlikely now knowing Take Two's financial status, but that wasn't as apparent in 2004. Given that TT were willing to sell their product at a deep discount, it's not unreasonable to go into debt in order to grab a license for the biggest sports genre around.
Maybe they knew going in that the money spent would include "special assistance" from the NFL at no extra charge. Little things like not having to pay hundreds of millions to retired players and such.
It takes two to tango but from where I sit, EA was playing the role of the male and leading throughout. I can only post the factoids that are available to me, the rest is simply speculation and we will probably never know what exactly happened. I can say that I do not recall any "bidding" involved earlier this year when the NFL extended the license to EA from 2009 to 2012.
A lot of gamers knew this would happen especially when the deal was announced back in 2004. It doesn't take a rocket scientist to figure out that you need competition to make a better product. FIFA Football became what it is today because of Winning Eleven. EA's NHL series became what it is today because of NHL2K and now NBA Live is starting to make strides because of NBA 2K.GTHobbes wrote:
You said before that EA must've been counting on picking up a few more sales back when they made the original NFL agreement. I wonder if they ever thought that their overall sales would actually DECREASE as time went by.
MVP Baseball progressed into one hell of a game because of competition. Madden is no exception as now, competition is based within EA. Right now the Madden series is it's own worst enemy.
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johnvon314
- Benchwarmer
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I think GT&Hobbes posted something similar on this but EA just keeps em coming.
http://wii.ign.com/articles/950/950903p1.html
EA Shift Focus to Wii
Riccitiello looks to rival Nintendo on its own platform.
by Martin Robinson, IGN UK
UK, February 4, 2009 - EA's John Riccitiello has spoken of how the publisher is to place half of its emphasis on the Wii, as it looks to 'rival Nintendo on their own platform'.
"Nintendo is the leader; they're getting half our emphasis in terms of title counts," said Riccitiello in the company's Q3 earning call, picked up by videogaming24/7, confirming that the hugely successful console will be a key platform for EA.
A Wii version of the space-bound survival horror Dead Space, announced in the same call, appears to be one of the first signs of this new focus.
http://wii.ign.com/articles/950/950903p1.html
EA Shift Focus to Wii
Riccitiello looks to rival Nintendo on its own platform.
by Martin Robinson, IGN UK
UK, February 4, 2009 - EA's John Riccitiello has spoken of how the publisher is to place half of its emphasis on the Wii, as it looks to 'rival Nintendo on their own platform'.
"Nintendo is the leader; they're getting half our emphasis in terms of title counts," said Riccitiello in the company's Q3 earning call, picked up by videogaming24/7, confirming that the hugely successful console will be a key platform for EA.
A Wii version of the space-bound survival horror Dead Space, announced in the same call, appears to be one of the first signs of this new focus.
"EA CEO: The Recession Is Our 'Blessing In Disguise'"
"Don't sweat those 1100 layoffs and closed studios at Electronic Arts (ERTS), CEO John Riccitiello said today at a gaming conference in Las Vegas: The recession is his company's "blessing in disguise."
Compiling two reports from Gamasutra and MTV:
"We did get fat in too many places. It seemed like anyone who could draw a guy with a gun with a crayon could get funded. At least for EA, we got a little too fat, and a little too reliant on where things were..."
"I actually think the economic crisis that the world moved into n 2008 was a blessing for the game industry...
“First of all, a lot of the riffraff is going to go out of business… it’s hard to compete with junk especially when they’re giving it away for free."
What Riccitiello said he sees is an opportunity for a better industry to emerge, one in tune with the modern spectrum of gamers. He said that the industry had planned for the current generation as if gaming was still what it was in 1999: pre-Wii, pre-mass-audience, pre-so-many-changes."
http://money.cnn.com/news/newsfeeds/sil ... 009_2.html
"Don't sweat those 1100 layoffs and closed studios at Electronic Arts (ERTS), CEO John Riccitiello said today at a gaming conference in Las Vegas: The recession is his company's "blessing in disguise."
Compiling two reports from Gamasutra and MTV:
"We did get fat in too many places. It seemed like anyone who could draw a guy with a gun with a crayon could get funded. At least for EA, we got a little too fat, and a little too reliant on where things were..."
"I actually think the economic crisis that the world moved into n 2008 was a blessing for the game industry...
“First of all, a lot of the riffraff is going to go out of business… it’s hard to compete with junk especially when they’re giving it away for free."
What Riccitiello said he sees is an opportunity for a better industry to emerge, one in tune with the modern spectrum of gamers. He said that the industry had planned for the current generation as if gaming was still what it was in 1999: pre-Wii, pre-mass-audience, pre-so-many-changes."
http://money.cnn.com/news/newsfeeds/sil ... 009_2.html