EA-NFL-NPD Interview

Electronic Arts really knows how to keep its name on everyone's mind, even if it is negative. When it was announced that EA is now the sole publisher with the rights to the NFL license, it appeared that not one person had a positive reaction to it. People were simply outraged and said that they would never buy another EA game. But really, you need to look at it a little closer. EA didn't simply go up to the NFL in private and slipped them some money to acquire this exclusive license. And while I don't want to sound like I'm supporting EA, the facts lead the blame to the NFL. They wanted to auction off the NFL license to just one publisher and EA got it. With that in mind, I wanted to get the facts. So I got some questioned answered by Trudy Muller at EA, Brian McCarthy at NFL and Anita Frazier, an entertainment industry analyst for the NPD Group. -I'm still waiting to get the NFL questions back, however.

Many have commented that the lack of competition will result in a lack of pressure on EA to put out a good football game. Trudy Muller at EA, however, doesn't think so; "The pressure is on us to deliver the best football game ever, that’s the same pressure that is on us every year. We strive to innovate and deliver a football game worthy of the fans who play it.. Just like the league and players, EA carries the responsibility for giving fans a quality experience so that they sign up for another season of fun."

Only time will tell what will really happen as a result of this deal and we are left to speculate. In fact numerous people believe that having the only official NFL games will result in a premium price. "There is discussion in the industry regarding the potential for publishers to increase prices on their highest quality games. Generally, demand is fairly inelastic with regards to price for the best-selling and highest quality franchises," said entertainment industry analyst Anita Frazier. Trudy Muller said that there are no current plans to raise the price but "both EA and the NFL believe that the game is a premium product that should earn a premium price." In other words, we won't see a price increase right away as they want to see how Madden will actually do being the only official NFL game.

Sega/Take-Two will be feeling a big hit from this as they were gaining a nice share of the market with their budget priced ESPN 2k series. How will these other publishers compete without the license? "Sports games without the league affiliation would likely have to offer truly innovative and compelling gameplay to compete in the market," said Anita Frazier. "There are plenty of titles released at the $19.99 price point that don't succeed in the market because the content is not that compelling. Ultimately the success of the title reflects its quality."

Midway Games has already announced their next football game, Blitz: Playmakers. The game goes beyond the game with 'on-field violence, off-field fallout and front-office politics of professional football.' If pulled off nicely, the game should be able to do pretty well without the license. In fact, this game seems to have plenty of interesting new ideas that football games could use to separate them from the past.

With the EA-NFL deal being for 5 years and the Xbox 2 possibly being released late 2005, that would mean that the deal would be for 4 years of the Xbox 2's life. That is most likely the entire life of the next Xbox or most of it. This deal really gives EA an early boost for the next-gen games. And Trudy Muller has confirmed with me that EA has been working on next-gen games for some time now. It is in my opinion that the next football game from each of the publishers will need to be great. This is because it will most likely be the last one before Xbox 2 comes out. They'll want to make a big impact on current generation hardware to influence the purchase of their next-gen games. With that in mind, EA's best decision would be to not raise their next Madden title to a premium price so people don't turn away when it comes to the next-gen Madden titles. They said that there are no current plans to do so, but there is still time before the game is released.

Highlights:
EA:

• "The agreements were proposed by the NFL and NFLPA. We have excellent relationship with the other leagues and will continue to work closely with them. We're not going to speculate on any plans the leagues may have."

• "Yes, we've been working on next-gen development for a while now, as well as continuing to innovate on current gen and new handheld hardware like DS and PSP."

• "Both EA and the NFL believe that the game is a premium product that should earn a premium price. However any speculation on pricing right now is just that -- guessing by people who are largely uninformed. Game prices are determined by market conditions and right now EA has no plans to raise prices."

• "There is discussion in the industry regarding the potential for publishers to increase prices on their highest quality games. Generally, demand is fairly inelastic with regards to price for the best-selling and highest quality franchises."

• "Sports games with a league affiliation generally perform better in the marketplace than do those that do not. Ultimately it depends on the quality of the game experience that the title offers to the player."