The Madden NFL Lawsuit: Suing EA For Fun and Profit

[Andy Chalk]

The Madden NFL Lawsuit: Suing EA For Fun and Profit

EA has earned the ire of gamers, a reputation as an evil empire, and even a lawsuit from ticked-off Madden fans, but Andy Chalk asks, has the company actually done anything wrong?

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[Singing Gremlin]

I was under the impression that there were pretty solid anti-monopoly laws, and a 70% price hike after removing competition sounds pretty much like a monopoly to me. Or maybe that's just in the UK.

 

[Echolocating]

Yeah. Even though it's just a dumb video game, the law shouldn't discriminate... even if EA is only pissing off a bunch of overzealous nerds.

 

[dukethepcdr]

I don't think it's anybody's business what a company does. If EA wants to make a deal with the NFL and the NFL goes along with it, how can we stop them without making the government even more socialist than it already is? As gamers and fans, if we don't like the move, we can vote against it with our pocketbooks. Companies like EA are only big and powerful because gamers like us buy their games. If we quit buying their games, they'd get the hint pretty quick that they were doing something we don't approve of. The decision should be made in the game store and the website store not the courtroom. Complaining and writing articles on posts like this while continuimg to buy every game EA makes will do nothing to get their attention.

 

[dukethepcdr]

I was under the impression that there were pretty solid anti-monopoly laws, and a 70% price hike after removing competition sounds pretty much like a monopoly to me. Or maybe that's just in the UK.

I'm in the U.S. and can't see that EA's football games are any more expensive than any other console game in the stores that are released at the same time. In fact, the exclusive deal hasn't made any change in the rapid drop in game price once the release year is over. Want a cheaper EA football game? Just wait a year or two after it's released and you can get it for less than half it's price when it was released. No game drops value as fast as a sports game.

 

[Cousin_IT]

NFL games are just JRPGs with mishaped rugby balls neway :-D

I dont think EA are in the wrong legally. Their games may have gone up in price but so has every other. & as the above says, if franchise fanbois werent the desperate sheep they are they could just wait 6-10month n the game will be 1/3 the price in a bargain bin. Companies may push the prices up but its consumers that determine how high they can go

 

[Andy Chalk]

I mean, what's the big deal with telling EA what it can charge for this game? It's not like they won't be able to afford "food, fuel or shelter" ;-D

I honestly can't tell but I'll assume you're joking here.

In which case I have to ask: why so unbalanced a view of the situation? Are you making the case that laws should only cover "food, fuel or shelter" and have a totally laissez-faire approach to all other goods and services? Do you really believe that should be the case, or are you just saying it because it supports your point that EA isn't so bad?

I guess my criticism is that I think you're adopting a line of logic ("food, fuel or shelter") for purposes of this article that I don't think you would adopt in another discussion where you had more sympathy for the consumer.

Which I guess makes my question: do you think there should be no regulation of trade when it comes to goods and services that are not "food, fuel and shelter"? If you don't, how do you explain that discrepancy with the logic you rest on here in your article?</b.

I'm not seeing any discrepancy, but I think there are two basic points of focus: One, it strikes me as rather hypocritical to squawk about free-market economies and the evils of socialism until it works itself out in a fashion you (that would be "you" as in "all youse guys down there") don't particularly care for; and two, if you're serious about effecting change at EA, rather than simply a cheap 15 minutes and five dollar rebate on the Madden 09, don't buy the product. The "food/fuel/shelter" thing is simply a way of making the point that the latest and greatest Madden NFL release is hardly something we can't live without, not a specific illustration of what I believe should be regulated.

Sympathy for the consumer really doesn't enter into it. I just fail to see where EA has actually done anything wrong.

 

[towelie06]

every single new release on the xbox 360 is retailed at £40 and madden was no different, all games have gone up in price.

even if they had hiked it up by 70% and nobody else had imagine how much they have to pay for the exclusive rights, they need to make their money back somehow.

getting the rights is one thing, but making poor games is another, and generally that is what EA sports do so just dont buy them, i agree with the article.

fifa had all the rights and PES had non whatso ever in the beginnings, not a single player name was correct, yet they focused on the core gameplay, got a fandbase, raised funds, and slowly but surely started to aquire some licenses.

 

[ccesarano]

On the 70% price hike: that's often misquoted or listed in such a way as to give the wrong impression. Several here have made note that Madden games aren't any more expensive than they once were. You'd have to go back to WHY this deal was made in the first place in order to get that "price hike". At the time, Madden came out at its regular $50 price tag, as EA was certain it would sell as usual. However, I believe 2K's football game at the time released for like $20 or $30 brand new, and it was similar enough to Madden that a lot of fans switched over. Instead of getting $5 for last year's Madden and paying $45 for an upgrade, they just decided to pay $20 or $30.

Normally Madden wouldn't see a price drop for almost a year, but after a month EA had to drop the price of Madden to $20 or $30 in order to compete.

THEN the NFL exclusive deal happened, clearly in retaliation to EA being forced to compete for a change.


As for whether we should be angry at EA or not, I may not care about the games, but I care about the industry. With no one to compete with, EA has no reason to make improvements except for what they see fit. If there are other games that come up with better ideas, they won't get noticed because, unfortunately, everyone wants to play as their favorite teams. This is why you don't see other Football games selling too well: you can't play as your favorite team, and people want that. I don't know why, but they do.

I also look at it as a channel buying exclusive rights to air the Superbowl. What would you do if Pay-Per-View made a deal with the NFL that only THEY could air the Superbowl? Now you had to pay money in order to watch it, and they can set their rates at whatever they want. It's an unlikely scenario, but what would you think?

What makes capitalism work properly is competition. If you stomp out the competition, incentive to make a better product begins to dwindle, and you have nothing but a greedy corporation. Even Microsoft has to compete with other companies, and it's forcing them to try and make better products (laugh all you want, but anyone without a childish Anti-MS bias can tell if they actually look into the products in-depth).

For the football video games to sell best, EA should not have the right to...have the rights.....*cough*

 

[Razzle Bathbone]

I don't think it's anybody's business what a company does.

Okay, I don't give a damn about sports games or EA, but when people spout this kind of shit, I have to respond. So just for the record, Duke, this is YOUR FAULT for deraling the thread.

It is our business what companies do. If it weren't, we wouldn't have laws that prevent companies from selling kiddie porn or thermonuclear missiles.

If EA wants to make a deal with the NFL and the NFL goes along with it, how can we stop them without making the government even more socialist than it already is?

When a company buys up an entire industry and creates a vertical monopoly on the production, distribution and sales of an item, that's not capitalism. Capitalism works (when it does work) because of competition. In order for competition to occur, there have to be multiple manufacturers and retailers in competition with one another.
This is why capitalism doesn't work when the government doesn't do its part, which includes smashing monopolies and oligopolies becase they are anti-competitive and anti-capitalist. IT'S NOT SOCIALISM, FOR FUCKS SAKES. Adam Smith explained all this shit centuries ago, and it pisses me off to no end that people still don't fucking get it. You think you live in a capitalist society? Think again. What you have at the moment is socialism for the powerful few and market discipline for everybody else.

Again, this might not be relevant to the EA Sports lawsuit, but somebody had to say it. Apologies for the pedantry.

 

[ErinHoffman]

Legally speaking I think that this is an interesting case and worth following just to see how it results and how it impacts the rest of the industry. Making this a "capitalism" versus "socialism" debate is kind of spotty and besides the point, I think. You could make arguments either way for EA's action being socialist or capitalist in nature without varying the actual actions they took.

Asking whether they did anything "wrong" is also complex. "Wrong" for whom? And are we talking ethically wrong (complicated), legally wrong (slightly less complicated and what the courts will decide), business-inadvisable? These are all variants of "wrong" and the answers to any of them are not black and white.

From a business ethics standpoint this becomes complicated to answer because if we are to say that EA is hampering innovation through monopolization, which seems to be the case, we are also saying that the NFL did not have the right to sell exclusive rights to its content, which is a sticky thing to assert.

Looking systemically at the issue, which seems to be what people tend to do, developing economics-based opinions, I think it does come down to innovation. EA's response to competition in the market, rather than working to compete by producing higher quality product, has been to engage in behaviors that instead *prevent* other companies from competing. This overall reduces the amount of innovation, which reduces overall quality of product, which reduces the economic growth and effectiveness of the market -- in which case the public and its government do have reason to be concerned. For the government to take action in this case (and I think it is a mistake to reduce this to "the government", just to mention; it is in fact a capitalistic response of the consumer to object to an unfairly narrowed market) can seem socialistic but would be in the interests of capitalism and market competition. Rather than participating in competition, EA is attempting to subvert it.

I think one of the questions that will come up is why exactly EA thought it needed the exclusive license. It's arguable that what they did was in the interests of their shareholders, but this is a question shareholders should be asking as well at this point, because of the negative effect on reputation that these exclusive licenses have caused. The Madden franchise seemed in no jeopardy at all, so it wasn't an act of self defense for them to secure the license, or even an issue of securing funding (as it might have been for a smaller developer) -- and it certainly doesn't speak to quality of product when you take business action to prevent your competitors from getting to the market. But it will come down to the bottom line in the Madden franchise especially because their mainstream demographic probably has no idea this suit is going on and may not even know that EA procured the exclusivity; they are not involved enough in the game community to care.

So -- "wrong"? It depends on who you are and what kind of "wrong" you mean. But the lawsuit is certainly an interesting development. A US court is not going to waste its time hearing a frivolous suit, so they may just try to get EA to settle -- but if they don't, we'll probably see some interesting opinions from the court.

 

[qbert4ever]

Smart words

What they said. Times two. I would also like to add that EA did, in fact, run over my puppy and I am still upset over my only compensation being a used copy of Madden '04. Ah well, at least now I have no reason to waste money on any more games from them for the next 80 or so years.

 

[nightfish]

has the company actually done anything wrong?

Yes, how about every series its touched.

 

[Anton P. Nym]

Much as I agree that Smith wasn't advocating "market red in tooth and claw" in The Wealth of Nations, I must ask that folks stop diluting the meaning of "monopoly".

This is a matter of the NFL (and Madden himself) and the other leagues negotiating with EA for use of their trademarks and other likenesses. It's not as if other publishers/deveopers are forbidden to create football games... the only restriction is that they can't use the likenesses of real-life players and teams of the leagues in quesiton, as EA already obtained those rights.

Sorry, but this danged furriner also sees the suit as frivolous.

-- Steve

 

[Geoffrey42]

has the company actually done anything wrong?

Yes, how about every series its touched.

While it is difficult to identify as a "series", I still think of it as such because the developers are continuing what they were doing before, except now under EA: Rock Band. Activision has the unique pleasure of driving that into the ground. The exception that proves the rule? Hard to say. EA has been getting positive press recently about mending their ways.

{smart,angry stuff}

Hear, hear! What he said.

A couple people said things along this line, including the author, so I had to say: just because other AAA games cost 50-60 dollars at retail, does not immediately negate any possibility of monopolistic effects on the price of the games. The issue is not whether the prices are in line with other games, but whether the prices are higher than they would be if there were competition. At least for the answer to the question "Is this price the result of monopolistic behavior?", you're coming at it from the wrong direction. The counter-argument in this case, as it would happen, is to claim that 2K was dumping below cost to gain market share, and thus their price of 30 was artificially low, and not sustainable. FAR more effective. Go ahead, use it, I'll pretend you came up with it on your own. You'll still have to find something to back it up.

ErinHoffman's point about the right to sale of exclusive license: what would the impact be of illegalizing exclusive licensing? How do monopoly laws apply to other industries if one of the players attempts to consume/control all of the "resources"? Essentially, is it illegal for me to buy all of the peanuts in the whole world?