EA Games monopolizes sports video games industry
It doesn?t seem so long ago that Microsoft was being hit with monopoly accusations and anticompetitive business practices suits. However, we live in different times ? the Microsoft monopoly?s sun is slowly setting. Internet Explorer, Microsoft?s web browser, is for the first time actually losing droves of users to free alternatives such as Mozilla Firefox. The company?s stranglehold on computer operating systems is loosening ever so slightly as many major businesses move to Linux as a stable, secure workstation environment. Meanwhile, longtime rival Apple Computer is leveraging the phenomenal success of its iPod family of digital music players to sell record numbers of new systems using the company?s homegrown Mac OS X operating system. The crown for the most questionable and despicable software monopoly is now descending upon the head of the world?s largest independent video game publisher: Electronic Arts.
One of Electronic Arts? most notable franchises is the explosively popular Madden football series. Football video games are one of the most lucrative genres in the business: at least half of current console owners (Playstation 2, Xbox, and Gamecube) are likely playing Madden, and they reliably buy the latest version every year. Such has been the pattern for the past decade of gamers. Madden is the dominant title in the genre, and, for many people, it has become synonymous with football titles in general.
It is easy to understand EA Sports? anxiety, then, about Sega Sports. Since 2000, Sega has been releasing its own football series. The NFL 2K franchise has been gaining popularity, and in 2003 Sega gained a license from ESPN to use the network?s resources in the game. ESPN NFL 2K5, the latest iteration of the series, was the third best selling game for the Playstation 2 and Xbox in 2004, selling 1.5 million copies and 1.0 million copies respectively. EA Sports? Madden 2005 was in front of Sega?s effort on the PS2, but the Xbox version wasn?t even on the radar of 2004?s top ten.
Part of Sega?s success this year came from an aggressive pricing policy. Video games normally retail for fifty dollars. However, this year Sega announced that all its sports titles would be priced at 20 dollars at release. This of course gave them a significant edge over Electronic Arts, whose sports games were all priced at the regular launch price. The ensuing price delta, along with high critical praise, allowed Sega to take a significant chunk of EA?s market share.
So how did Electronic Arts respond to having one of its favorite genres pushed around? By completely eliminating all possible competition. On December 13,
Electronic Arts signed a deal with the National Football League to have rights for an exclusive NFL license for five years. Such a deal means that no other game developer can make a game using NFL teams, NFL players, or NFL stadiums ? period.
As if that weren?t enough, on January 17, Electronic Arts signed a fifteen year deal with ESPN to have access to all of the network?s resources. Electronic Arts has used its market capital (at over a $15.5 billion market cap, it is the fifth largest software company in the world) to eliminate all competition in what was becoming a very competitive genre, and has also crippled most of Sega?s sports lineup by taking away their brand recognition.
These moves are alarming in their own right, but when some of the other recent news about EA is considered, a pattern starts to appear. On December 20, EA announced that it had purchased a 19.9 percent stake in Ubisoft, a France-based game company. Ubisoft holds the licenses to many of the most popular game franchises of the past five years, including all of the Tom Clancy games, the Prince of Persia series, the Myst series, and the Rayman series.
Ubisoft announced a press release the same day, saying they considered the purchase hostile and were willing to fight EA if they ever attempted to purchase the company outright. The deal is still waiting for antitrust authorization by the U.S. government.
As if hostile takeovers weren?t enough, Electronic Arts has recently come under scrutiny for mistreatment of its employees. On November 10, an anonymous source posted an essay online about her experience as the wife of an EA employee. The source, ?ea_spouse,? told horror stories of twelve-hour workdays, six days a week, with meager pay and the ever-looming threat of poor job security. Most development companies experience work schedules like this as the ship date of a game nears; however, Electronic Arts kept its development teams in a state of permanent crunch, even when the release date was months away. Shortly after the accusations came out, it was revealed that many EA employees were preparing a class-action lawsuit against Electronic Arts for not receiving overtime pay.
Randy Pausch, a professor of human-computer interaction at Carnegie Mellon, spent the spring 2004 semester at Electronic Arts. ?I would say that [long hours were] a concern, not a complaint, with most people I spoke directly with,? said Pausch. ?To a larger point, I think that EA is a bit like Microsoft: it?s a very aggressive, very young corporate culture that can best be described as ?play hard or go home.??? Pausch has described EA as a ?ruthless meritocracy,? whose corporate philosophy regards a late game release as a dire misdeed.
As Electronic Arts continues to gobble up smaller studios, adding their intellectual property to the company?s already vast portfolio, hopefully someone in the Department of Justice will take a long look at the company. Electronic Arts has announced intentions to become a household name on the magnitude of Disney; their practices to get to that goal, however, may not be very scrupulous. The best way to keep Electronic Arts in check is to vote with your wallets ? as a business, they?ll have to listen to that.
Evan Sundwick (esundwic@) is a sophomore professional writing and social and decision science major and serves as The Tartan?s Production Manager. He accepts all responsible replies.