Economist: EA’s Madden Monopoly Cost Gamers Up To $926 Million

A University of Michigan economics professor estimates that Electronic Arts collectively overcharged Madden buyers between $701 million and $926 million during the years 2006 through 2009.

Dr. Jeffrey MacKie-Mason made his claim in a document filed last week with the U.S. District Court in San Francisco. Mackie-Mason was brought into the case as an expert witness by attorneys representing Geoffrey Pecover and Jeffrey Lawrence. The pair of gamers are named plaintiffs in a class-action suit alleging that EA used its exclusive licensing deal with the NFL to eliminate Take Two Interactive’s competing NFL 2K series. The suit charges that EA then exploited the resulting competitive vacuum to dramatically raise the retail price of Madden.

While MacKie-Mason acknowledges that his estimates are based on incomplete data, he writes:

I provide this information for the limited purpose of allowing the Court to assess in rough terms the burden on Electronic Arts in relation to the magnitude of potential damages… Under California’s antitrust statute, it is my understanding that these damages would be trebled.

MacKie-Mason arrived at the eye-popping figures using an estimated overcharge percentage that ranged from 50% to 66% for the 30.04 million units of Madden sold during the 2006-2009. He writes:

When Take-Two was able to compete unhindered, Madden NFL’s competitive price was in the range of $19.95 to $29.95. I assume for this exercise that these would have been Madden’s prices but for the alleged [monopolistic] acts.

Based on Mackie-Mason’s estimate, attorneys for the plaintiffs have requested additional data for Madden sales going back to 2001. In a response, attorneys for EA agreed to supply as many of the requested documents as they could locate, but were unsparing in their assessment of Mackie-Mason’s analysis:

EA respectfully submits that Dr. MacKie-Mason’s analysis is fundamentally flawed on multiple levels. Indeed, Dr. MacKie-Mason’s estimated magnitude of damages is nothing more than pure fiction – it has no basis in fact or law…

As GamePolitics reported last month, U.S. District Court Judge Vaughn Walker ruled that the plaintiffs’ monopoly suit could go forward, but limited the scope of the case to claims arising in California and Washington, D.C. where Pecover and Lawrence reside.

DOCUMENT DUMP: Read Dr. MacKie-Mason’s estimate here… Read EA’s response here

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30 comments

  1. Wormdundee says:

    Which is not illegal, or even grounds for a lawsuit. I’m quite sure they have a clause somewhere stating that they can discontinue any of their servers for any reason at any time. Sure, it’s not a very ethical thing to do, but that doesn’t always mean illegal.

  2. Neo_DrKefka says:

    You guys forget about DLC and the loss of online gaming servers being turned off to buy the new game. Pretty much when the next version is released the servers are turned off making the multiplayer version useless

  3. jedidethfreak says:

    The 2k series was decent at best, even when they had the NFL license.  Look at the sales figures and review scores.  Madden has dominated the football game industry since inception, both in quality and quantity.

    Freedom of speech means the freedom to say ANYTHING, so long as it is the truth. This does not exclude anything that might hurt someone’s feelings.

  4. hellfire7885 says:

    2K games gave good competition with their own football offering from 2K sports. Noew, they can’t offer anything that people will buy as peopel want the real players and real teams. And EA fairly recently went after Take Two to get the 2K sports liscense, if that were the case sports game prices would be high across the board.


  5. jedidethfreak says:

    The problem is that EA’s "competitors" weren’t really any competition to speak of.  The sales were horrible, as were the games themselves.  The NFL giving EA exclusive rights was the right business decision for them, due to the fact that EA’s Madden series has always been the sales winner amongst it’s competition.

    Freedom of speech means the freedom to say ANYTHING, so long as it is the truth. This does not exclude anything that might hurt someone’s feelings.

  6. Alex says:

    They sure as heck wouldn’t make much profit if they did, as All-Pro 2k8 proved spectacularly. It was generic but as close to being an actual NFL game as they could get without actually using the NFL teams or current players, and it STILL sold poorly, despite good reviews.

    I’m not under the affluence of incohol as some thinkle peep I am. I’m not half as thunk as you might drink. I fool so feelish I don’t know who is me, and the drunker I stand here, the longer I get.

  7. Tyler Baumbarger says:

    The second paragraph is the funniest thing I have read in a long time.

    The first paragraph is the saddest thing I have read in a long time. Because it is probably true. Seriously, can’t they just charge 5 bucks for DLC every year?

  8. GoodRobotUs says:

    To be honest, in the case of Madden, I wouldn’t be surprised if they kept the player details as a seperate data file, and simply updated that. Add a few tweaks to the graphics engine, maybe motion capture a few new scoring celebrations, and wham, there’s next years’ edition.

     

    Though, in all fairness, I’ve never liked Sports games, ironically enough, the idea that I am a sword-wielding mage warrior from Asgard is not a problem, but pretending I could run up and down a field for 90 minutes without having serious cardio-vascular problems is feeling like I’m lying to myself…

  9. chadachada321 says:

    It may be a monopoly of sorts, but I think that they are totally justified in over-charging people if those people are honestly stupid enough to pay $60 for a game that is immensely similar to the previous 4 games.

    -If an apple a day keeps the doctor away….what happens when a doctor eats an apple?-

  10. GoodRobotUs says:

    Well, the cause of that monopoly is another matter, it may be a ‘legal’ monopoly of the market, but it is still a Monopoly.

    As was mentioned by other posters, that doesn’t cover the fact, however, that just because prices went up, that people were compelled to buy the goods, and there is a valid argument of ‘is it a Monopoly if there is a choice?’.

  11. Magic says:

    Give me back my money EA!

    How much do I need to sue them for? $926,000,000 divded by X gamers in the world.

  12. eston says:

    Let’s see here, he says Madden games used to $20-$30, but now EA charges 50%-66% more than that…..that puts it at right about $60.

    OH NOES, EA is charging the same thing for their new titles as almost every other console developer! We must put an end to this grievous injustice!

    lol, good luck with that. In the end, I think this case will not be passing Go nor will he collect the proverbial $200.

  13. Alex says:

    There are plenty of viable alternatives to Spiderman the superhero genre, Batman: Arkham Asylum is coming out in a few months.

    WWE has at least one viable alternative, there was a TNA game not too long ago that didn’t do too badly.

    God knows there’s millions of alternative fantasy games to Lord of the Rings.

    What’s the viable alternative to the NFL? The only one I can think of is All-Pro Football 2k8, and in spite of the fact that it got good reviews, sales were so bad that they’re not bothering to make any more games.

    I’m not under the affluence of incohol as some thinkle peep I am. I’m not half as thunk as you might drink. I fool so feelish I don’t know who is me, and the drunker I stand here, the longer I get.

  14. Im_not_Herbert says:

    Thank you!  Glad someone uinderstands what actually happened.

    And EA hasn’t "overcharged" in any event… Madden releases for $60, the same as every other A list title (and most of the b listers as well) released.  Now, if they were charging more than that, that would be a different case.

    I would like to think that this case will be over and done with quickly… then again, a jury just awarded the bloodsucking recording industry almost two million dollars for 24 songs, so…

     

     

     

    Your Yak is Weak!

  15. ZippyDSMlee says:

    All the more reason to break exclusive licensing……… there should be a base price if you can’t cough it up you can’t try and make money for the IP and its owners.

     


    I am a criminal because I purchase media,I am a criminal because I use media, I am a criminal because I chose to own media..We shall remain criminals until Corporate stay’s outside our bedrooms..


    http://zippydsmlee.wordpress.com

  16. Stoli says:

    Agreed! The NFL has the right to license themselves to whoever they want, whether it’s one company or several.

    I would also imagine that those licensing agreements probably include how much EA would charge for their games as well.

  17. Boffo97 says:

    It’s *again* not a monopoly but an exclusive license. Issuing the exclusive license was the NFL’s idea, as is their right.

    As such, it has cost gamers precisely $0, just like the fact that EA can’t make Spider-Man games, or Activision can’t make WWE games or Take Two can’t make Lord of the Rings games.

    I fully expect any suit to laughed out of court once these indisputable facts come to light.

  18. chadachada321 says:

    Too bad that it’s a D-list game =/

    -If an apple a day keeps the doctor away….what happens when a doctor eats an apple?-

  19. jake1123456 says:

    I only bought one Madden game, for PS2 a while back so I’m no expert. But, I imagine that EA has charged 60 bucks (US) for every madden game of this console generation, just like everyone else charges for all their games that aren’t licensed pieces of shit. If that is indeed the case, then they haven’t "exploited" anyone, that’s just what the games of this generation have been set as cost wise. Also, if anyone who enjoyed playing the most popular game franchise in the world that is Madden and didn’t want to pay whatever "ridiculously high price" EA felt like charged in their "supposed" monopoly, they wouldn’t. Simple as that. 

    And as far as dumb lawsuits, there was that lady who sued McDonalds for the coffee incident and we all know how that went.

  20. SeanB says:

    They did not have a monopoly on the market, they had exclusive use of the madden franchise.

  21. GoodRobotUs says:

    I’d say the assesment isn’t wholly accurate, since things like cost of living and inflation will always add to the price, however, I am also 100% convinced that EA were deliberately pushing up the price of their yearly release of Madden because they had a monopoly on the market.

  22. ZenAndNow says:

    It is somewhat amusing how people consistant use emotive arguments to get around the fundamental basis of capitalism:

    "Everything is worth what its purchaser is willing to pay for it."

  23. SeanB says:

    EA did not overcharge gamers 1 penny for that game.

    Each and every person CHOSE to pay the asking price. Now grow up.

  24. SeanB says:

    Agreed, i’m sick of this useless commentary about wether EA is overcharging. They’ve got the right to charge whatever they want, and consumers have the right not to buy it.

    If consumers were really angry about the price, they wouldnt’ be buying enough of them for EA to justify keeping the cost there.

  25. ZippyDSMlee says:

    Back when they had competition  and game prices caped at 40ish$ more than 50$……..


    I am a criminal because I purchase media,I am a criminal because I use media, I am a criminal because I chose to own media..We shall remain criminals until Corporate stay’s outside our bedrooms..


    http://zippydsmlee.wordpress.com

  26. jedidethfreak says:

    When did a Madden game release at 20 bucks?  They’ve always been 50 at release (or 60 on PS3/360).  Where the hell is this guy getting his stuff?

    Freedom of speech means the freedom to say ANYTHING, so long as it is the truth. This does not exclude anything that might hurt someone’s feelings.

  27. PHX Corp says:

    I brought Madden 09 in the past But, I Think Pennsylvania gamers are being left out over the issue of EA’s Maddenopoly

    Watching JT on GP is just like watching an episode of Jerry springer only as funny as the fights

  28. ecco6t9 says:

    These people are morons, Madden 2005 was launched at full price then had a price drop to $29.99. Secondly Take 2 rose the price of their MLB games back up to $40 and no one complained.

    Fact is I too can twist words around here…

    Take 2’s 2k Series use to be $19.99 and now they aren’t anymore, I assumed when sports games were going to come out at $20 they would always release at that price point reguardless of the system they are on.

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