[CNN] EA's NFL price tag = $300 Million ?!

R

Rhindle

Member
Sorry for yet another NFL thread, but geez ... $300,000,000 for one game franchise.

EA's announcement it has signed an exclusive licensing deal with the NFL and the NFL Players Association effectively removes the competition from one of the industry's most popular genres. Under the terms of the deal, no one else will be allowed to develop or publish a video game (for any system) featuring NFL teams, players, stadiums or footage for the next five years.

EA did not announce the terms of the deal, but sources told me the price tag was north of $300 million (though well below the $500 million figure some have suggested).

Assuming that's correct, at least one industry analyst feels EA (Research) might have overpaid.

"If they paid more than $200 million, then I seriously question their judgment," said Michael Pachter, an analyst with Wedbush Morgan Securities.
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A bigger question, perhaps, is what happens five years down the road. Will the license be hotly contested – or has EA, in essence, bought a lifelong deal with the NFL? One of the chief expenses in sports games is the cost to render the players' likenesses - in other words, to create lifelike animated facial models, which give in-game players a photo-realistic appearance.

When the EA/NFL/NFL Players deal expires, no company will have renders of the league's 1,400 players, which would cost millions – and could discourage bidding.

"I'm surprise that the naïveté of the NFL and its players," said Pachter. "By giving a five-year license and giving EA an exclusive, they're going to eliminate all of the competition. So in five years, the license fee is going to be whatever EA decides it wants to pay."
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Full article here: http://money.cnn.com/2004/12/14/commentary/game_over/column_gaming/
 
that's a great point in your second quote. what if they did effectively price the deal out of everyone's reach not only now but for quite a stretch down the road? I hope someone somewhere has an answer for this. (Meaning an exclusive NBA deal or just another football game minus official trappings or something like that)

I wonder how the teams who work on the football games at other developers are taking this. maybe a night of binge-drinking and the like to get the bad taste out of their mouths? :)
 
Link316 said:
I seriously doubt this is true because a price tag like that gives EA no room for profit
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Well here's a good time to flaunt your idiotic signature from GameFAQs:

"Gaming is ... Art - MS, Fun - Sony, Profit - Nintendo"

So I guess profit wins. :lol
 
All GAF members should put in some money to buy the rights to a movie that’s coming out in a few years, and then we could sell it to EA!


Or we could all save up over the next 5 years out bid EA when the NFL license comes up for sale again shutting down EA and saving the world!
 
CVXFREAK said:
$300 Million?!?!?!?!?!?!?!?!?!?!?!?!?!?!?!?!?!?!?!?!?!?!?!?!?!?!?!?!?!?!?!

$60+ Madden anyone?
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Yup. That's my prediction. $60 for standard Madden 2006, $70 for a Collector's Edition (if Tiburon does one), and online fees for PS2 users.
 
EA apparently isn't planning on using the NFL license just for Madden, as it sounds like they have some other management type game in the works.

Not to mention there's NFL street, and whatever other spin offs they can possibly come up with.
 
Can anyone smell the EA bullshit?

EA didn't do this a reaction to Sega or any other developer. The NFL and Player's Association went to several different developers wanting to ink an exclusive deal. We have an excellent relationship with these two groups (e.g. 15 years of making Madden) and they went with us.
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EA's PR spin is that the NFL came to them for an exclusive contract. Yeah, right.

EA is probably going to threaten CNN for posting that they paid for the exclusive since the bullshit they are spinning is making them look so innocent.
 
ManaByte said:
Can anyone smell the EA bullshit?



EA's PR spin is that the NFL came to them for an exclusive contract. Yeah, right.

EA is probably going to threaten CNN for posting that they paid for the exclusive since the bullshit they are spinning is making them look so innocent.
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I agree.

EA has a ton of money, but there is no way in hell they could have outbid Microsoft in a bidding war.
 
there's plenty of room for profit. madden 2006 will be $49.99.

how many copies do they sell a year? 5 million? that's $250 million a year right there. multiply that times 5 and for a total of $1.5 billion. subtract the estimated $300 million they paid for the license to get $1.2 billion. subtract any number you want for development costs and the retailers cut and ea still has a nice chunk of change.

in addition to that, they are only further solidifying their franchise as THE football game to consumers. even if they bail out of their exclusive contract when the five years is up, people will have gone practically an entire hardware generation without seeing any other football game. madden will be synonymous with football (even more so than it is now). not a bad investment. personally, i think it sucks though, but hey...
 
Mrbob said:
I agree.

EA has a ton of money, but there is no way in hell they could have outbid Microsoft in a bidding war.
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Heh, EA goes up against Microsoft in a bidding war and Microsoft just says "Ok, we buy you and put up the highest bid. You lose. We now own Madden." EA cries.
 
Madden is already synonomous with football.

I really don't see how this deal benefits them too much besides cutting the competition out from under their knees.

They paid the NFL 300 million dollars to own the market they currently already dominate.
 
MS aren't stupid enough to go up against EA. Who cares if they could outbid them? EA would make them pay when they dropped all support for the Xenon, and that would hurt MS so much more than an exclusive NFL license could ever gain them.
 
Mrbob said:
Madden is already synonomous with football.

I really don't see how this deal benefits them too much besides cutting the competition out from under their knees.

They paid the NFL 300 million dollars to own the market they currently already dominate.
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i agree, but it seems like ea is just being cautious. in the long run, i don't think this is going to hurt them at all. i suppose sega/take-two got 'em shook and they took pre-emptive action to make sure they continue to dominate the market...
 
={<SMOKE>}= said:
there's plenty of room for profit. madden 2006 will be $49.99.

how many copies do they sell a year? 5 million? that's $250 million a year right there. multiply that times 5 and for a total of $1.5 billion. subtract the estimated $300 million they paid for the license to get $1.2 billion. subtract any number you want for development costs and the retailers cut and ea still has a nice chunk of change.
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I hope you're right, but I don't agree. Why wouldn't EA take advantage of the situation and institute a higher price point for Madden and bring in even more profit?

We've been constantly warned that game prices are eventually going to go up anyway, and this is a perfect opportunity for EA to get the ball rolling with no competition to speak of. If people want to stay current with NFL rosters and whatever new things that Tiburon (hopefully) adds, they're going to spend the money.

Think about it for a minute. Do you honestly think that the casual gamer would have stayed away from Grand Theft Auto: San Andreas or even Halo 2 if they cost $60? I don't think so.

Again, though, we can only speculate. If I turn out to be wrong, it's better for everyone.
 
I think it's rather obvious what's going to happen. MS is going to go to Ea and say, "Hey we will give you say 150 million to make Madden and Xbox exclusive game." Bam now for the next 5 years Sony is screwed. Xbox 2 is guarenteed the winner of the next gen by a long shot. Not even Sony would be able to put out enough games to equal what the Madden user base will generate every year.
 
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