EA Sports: Our Game's a Wreck, So We'll Scratch a Check
It's an ugly, ugly day for sports gamers and for all gamers in general.ESPN NFL 2K5, bluntly, kicked Madden's ass this year. Visual Concepts de-cleated Electronic Arts. With the right sliders and franchise house rules, ESPN is probably the best sports video game ever made. Madden played old and tired, with inexcusable visual errors and announcing that would have been very well-received at a funeral.
This has happened to Madden before, though. The original Sony GameDay was so much better than Madden's planned Playstation version that EA cancelled it and took a year off. Then they responded with a much improved game. NFL 2K on the Dreamcast hammered the PS2 version of Madden. Again, EA responded. One of the things I've always admired about EA's sports division is that no matter what they say publicly, they know privately what game is best, and if their game isn't, they make it better.
Sega punched EA in the face, though, with their $19.95 pricing strategy. EA said enough in their earnings conference call to indicate that Sega hurt them, and EA's decision to lower the price to $20 on November 1 (months earlier than usual) is a second hint. I said in July that I thought ESPN would sell over a million units this year (4X last year), which seemed ludicrous at the time, until it sold over a million units in three weeks. The combination of a great game at a great price, along with a very weak effort from Madden, caused a seismic shift in the football market.
I scratched some numbers together to help show what happened. In 2003, Madden unit sales were roughly five million, while ESPN sold about 450,000. That's over a 10-1 advantage. This year (to the end of November, and I'm not including Gamecube sales), Madden's sold over three million units, but ESPN has sold over two million. To go from a 10% market share to 40% in one year is stunning. Take-Two's pricing strategy was the best strategic move, by far, of 2004.
I expected EA to respond as they always have with the Madden franchise--hard work, a new engine, and greater attention to detail. Not this time. Instead of working hard to improve their game, EA responded like the asshats they apparently are. Yesterday, it was announced that they had purchased the exclusive rights to use real NFL players and stadiums in their games for the next five years.
On every level, that's pathetic. This does nothing to improve Madden, no matter what marketing horse crap EA might try to shovel. All it does is kill ESPN. And that sells all of us out. And now EA has absolutely NO reason to improve their game, because there won't be any competition.
There are a couple of interesting, infuriating, and disappointing nuances in all this. First is how much EA paid for the exclusive license: according to an article on CNN Money
(http://money.cnn.com/2004/12/14/commentary/game_over/column_gaming/), the price was OVER 300 MILLION DOLLARS. That is so utterly ridiculous on so many levels that I burst out laughing when I saw the number. I know it's an exclusive license, but they're spending more in licensing per year than Madden makes in profit--far more. How much better could they have made THE GAME by spending an additional sixty million a year in development? Instead, they use it for a kill shot on the competition.
From another angle, though, maybe that's not so stupid. Do you wonder how EA will pay for this? Here's some easy math: 5,000,000*$10=$50,000,000. That's a ten-dollar price increase, multiplied by five million in unit sales, and they've almost paid for the license right there. So expect a $59.95 Madden game. At least.
Second, look at the last sentence of Take Two's (ESPN's distributor) press release yesterday: “We remain committed to continued diversification of our product portfolio, including sports." By far, what's most important about what Take Two said is what they didn't say. They mentioned sports in general but didn't say anything about being committed to ESPN Football as a franchise. In other words, even though next year's version is well into development, they made no commitment to ship it, and they might not. And if they did ship it, they'd have to ship it at the $19.99 priced point, which means they'll move units but not make much, if any, money on the title. So they have to weight the already sunk cost of development versus how much more they need to spend to finish the game versus the number of units they think they can move at a lower price point. I wouldn't be surprised at all if the game is cancelled within weeks.
The other bad guys, maybe the biggest bad guys, in this sorry scenario are the NFL and the NFL Player's Association. They solicited the exclusive bids. They also just killed the canary. It's always been in their best interests to sell licenses to as many reputable game companies as possible, because it increases exposure and the strength of the brand--and for the NFLPA, the brand is their players. Who's going to want to build an NFL game from scratch five years from now when the EA license runs out? Who's going to spend the million and millions of dollars necessary to create the facial images, animations, etc.? No one besides EA, which means at that point, the license is worth exactly what EA will be willing to pay for it, and without competition, it won't be much. Stupid, stupid move.
I've thought about this quite a bit since yesterday, and here's what I'm going to do: I'm not buying EA games anymore. From EA, that is. I can still play their games, and I'll still write about them, but given the massive size of the used game market, particularly for console games, I'm just going to buy them used. EA won't make a dime from me. I don't mind paying for them, but I'm not paying EA. And if you feel like I do about this, I encourage you to do the same.
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