Lawsuit Against EA Sports?

[mestevo]

Quote: Originally Posted by TimLawNYC

Let's go with your "Whopper" example, but make it more applicable to this case. It's not a question of whether people might suddenly greatly prefer a Whopper to a McDonald's QPC--that would just be the free market functioning as it should, and would present no antitrust problem. But what if BK went out tomorrow and paid billions of dollars to lock up exclusive distribution contracts with all of the beef suppliers in the USA, so that those suppliers could only deliver beef to BK stores and not to McDonald's or Wendy's or any other fast food restaurant? BK would then have monopoly power over all fast food beef hamburgers, because nobody else could get the necessary input (ground beef) to make them. McDonald's and Wendy's could bring an antitrust challenge alleging that BK was foreclosing competition by locking them out of beef distribution. But, BK would argue, they don't have market power because people could still go to these other chains for fast food--chicken nuggets, chicken sandwiches, salads, etc. BK would say that they haven't even tied up the "burger" market because McD's could still make veggie burgers! Of course, McD's would argue that (as we all know) a veggie burger is a poor excuse for a burger, and would not have anywhere near the same sales numbers as a delicious Quarter Pounder with Cheese made from beef. So even though McD's could still make "burgers" in name, the only kind of burger sufficiently desirable to customers to be economically viable for McD's to sell would be a burger made from beef. And chicken sandwiches, though still fast food, just aren't the same and don't cut it when what you really want for lunch is a greasy burger. The same scenario applies here. EA, like BK in the example, has tied up a necessary market input (beef or exclusive licensing). The plaintiffs, like my McD's in the example, will argue that market alternatives without this input are not financially viable (i.e., nobody wants to play an unlicensed college football game, just like no self-respecting carnivore wants to eat a veggie burger). So even though other companies can still make a football game, that doesn't matter if they can show that these games won't sell without the use of the license that EA has locked up. Monopoly power can exist in any industry or market, public or private. The kinds of public utilities you mention are problematic because those industries operate best as natural monopolies (which is why most utilities are quasi-government entities). But a private company can surely own monopoly power over a market--many of our current antitrust laws came about due to the monopoly abuses by huge private companies who dominated the oil and steel industries in the late 1800s. Trademarks and Copyrights do give certain monopoly power over a particular product. There is great tension in our legal system between Intellectual Property laws' goals of encouraging innovation and Antitrust laws' goals of preventing market power abuses (again, market power itself is not illegal; only abusing that power, or illegally obtaining it in the first place, is an antitrust violation). But rest assured that EA is not protected from these laws just because it has an IP license with the NCAA and NFL.

I don't think this is an accurate analogy because all that has been made exclusive in the football video game market is the branding, another company can make a complete football game with feature parity to the licensed games but nobody has attempted to. Everyone's tried to get cute to differentiate rather than go the PES route and simply make a better game.

To make EA having exclusivity fit your analogy, you'd have to say they've got exclusive rights to 11v11 football.

[TimLawNYC]

Quote: Originally Posted by mestevo

I don't think this is an accurate analogy because all that has been made exclusive in the football video game market is the branding, another company can make a complete football game with feature parity to the licensed games but nobody has attempted to. Everyone's tried to get cute to differentiate rather than go the PES route and simply make a better game.

But if the branding is a necessary component to make a viable product in the market, then another company really can't make a competing football game, because regardless of its features people won't buy it without the licensing. Would you buy a generic "College Football 2012" game with completely fictional college teams and players? Did you buy Backbreaker or APF 2K8? Would you buy the "Veggie Big Mac" from McDonald's if they could no longer serve beef, or would you go next door to Burger King?

I'm not "getting cute", or even advocating for one side, I'm just illustrating what the legal arguments on both sides here will likely be.

[TimLawNYC]

Quote: Originally Posted by mestevo

To make EA having exclusivity fit your analogy, you'd have to say they've got exclusive rights to 11v11 football.

No, it's way more complex than that. There are literally hundreds of ways to define the market, and my whole point from the beginning has been that the outcome of this case will likely turn on the market definition adopted by the court.

I don't want to type it all out again, but I strongly encourage you to read the earlier posts in this thread for the market definition discussion.

[coogrfan]

Quote: Originally Posted by TimLawNYC

You're absolutely right that market power itself is not illegal. But there are many ways to show illegal monopoly conduct other than unfair pricing. For instance, the plaintiffs might argue that consumers have been harmed by the quality of the games decreasing--that they're still paying the same every year, but that Madden would be a much better game for that $60 every year if they still had competition from another company.

Such an argument would be extremely hard to prove, would it not?

Quote: Originally Posted by TimLawNYC

The fact that NFL 2K5 retailed for $20 (and that EA dropped the price for Madden that year as well) may lead to an argument that prices might be lower for NFL games if competition still existed.

Imo that claim is dubious at best, for a couple of reasons:

1. VC made it clear at the time that the $20.00 price tag was a one year experiment (iirc VC raised their prices back to the industry standard the following year); to the best of my knoweldge no other annually released sports title before or since has released a new version at a price significantly lower than the previous year's installment.

2. The Madden 05 price drop did not occur until several months after the game had been released. EA could reasonably argue that such price drops are common in the video game industry following the initial sales rush.

A few details concerning Madden 05:

Madden NFL 2005 launched at the then-industry standard price of $49.95 ($30 more than NFL 2k5). The game set a record for the biggest opening week sales numbers in series history to that point, despite the fact that the bargain priced NFL 2k5 had been released approx a month earlier. http://ps2.gamespy.com/playstation-2.../540367p1.html

EA's initial response to 2K's $19.99 across the board pricing strategy was a buy 2, get 1 free offer. This went into effect on Sept. 27 and lasted until Nov.14, 2004. http://www.gamespot.com/news/6108303.html

In Nov 04 EA announced a price drop on Madden (note that the game still sold for $10 more than NFL 2k5) http://www.gamedaily.com/games/madde...rop/3122/7940/

Prior to this price drop, EA had sold more copies of Madden 05 in 12 weeks than NFL 2k5 did in it's first 5 years. This despite having an initial price that was more than double 2k5's.

Quote: Originally Posted by TimLawNYC

In many cases, there exists a presumption that consumers are harmed if viable market competition has been foreclosed through monopoly conduct--so if EA acted in violation of the Sherman Act in obtaining the licenses, the fact that 2K was then forced to cease making their NFL game might alone be enough to assume harm to the market and to consumers. There are many arguments that might be made here.

What evidence is there to support such a claim, apart from a few disgruntled internet forum posters? Would that in itself be enough to convince a judge that the consumers had been harmed?

[PatriotJames]

I'm sick of is this a monopoly or isn't it? Is this that or is it this?

We shouldn't be sticking up for EA as gamers or whatever the courts/law says is right. We should rally together to take down EA for the better of the GAMING INDUSTRY! I highly doubt everyone wants 1 NFL game for the rest of our lives to choose from. Think about that one. I'm 26 right now, I still don't want the only option of Madden when I'm 36, 46, etc. and I'm sure our children will think the same.

Gamers deserve options, no matter the game. How many Call of Duty/Battlefield/Socom type games are there? How many companies can create an NBA game? We have options when it comes to these things in gaming. It should be no different than NFL. That's the entire point.

Take me to law school and tell me how ridiculous I sound because what I say would never hold up in the courtroom. I don't care! This is freedom. The right to choose. All we have is the right to choose to buy or not and personally and I think I speak for most when I say that's not enough.

Thank you for reading my rant.

James

[mestevo]

Quote: Originally Posted by TimLawNYC

But if the branding is a necessary component to make a viable product in the market, then another company really can't make a competing football game, because regardless of its features people won't buy it without the licensing. Would you buy a generic "College Football 2012" game with completely fictional college teams and players? Did you buy Backbreaker or APF 2K8? Would you buy the "Veggie Big Mac" from McDonald's if they could no longer serve beef, or would you go next door to Burger King? I'm not "getting cute", or even advocating for one side, I'm just illustrating what the legal arguments on both sides here will likely be.

What determined a product is viable? The ability to become a blockbuster like Madden is every year? Selling 5 million copies is the exception, not the rule. Licensing provides an advantage, but you can make other football games, where is the line drawn at viable?

The getting cute comment wasn't a shot at you, it was at the competition. The competition hasn't tried to make a competing game, they've tried to manufacture an alternate type of football altogether. There's nothing stopping someone from creating a game that has feature parity with Madden, nobody has bothered to make one yet, that's why I don't think the beef exclusivity analogy is valid. It's the same product, just comes down to the type of lipstick on each pig.

Proponents tout Backbreaker's 200,000 sales as a success. With no marketing, it is. That was a bigger difference than not having a license IMO, and both it and APF2k8 were a license away from selling 5 million.

[PatriotJames]

Quote: Originally Posted by mestevo

What determined a product is viable? The ability to become a blockbuster like Madden is every year? Selling 5 million copies is the exception, not the rule. Licensing provides an advantage, but you can make other football games, where is the line drawn at viable? The getting cute comment wasn't a shot at you, it was at the competition. The competition hasn't tried to make a competing game, they've tried to manufacture an alternate type of football altogether. There's nothing stopping someone from creating a game that has feature parity with Madden, nobody has bothered to make one yet, that's why I don't think the beef exclusivity analogy is valid. It's the same product, just comes down to the type of lipstick on each pig. Proponents tout Backbreaker's 200,000 sales as a success. With no marketing, it is. That was a bigger difference than not having a license IMO, and both it and APF2k8 were a license away from selling 5 million.

Yeah you pretty much nailed something I really hadn't thought about. Someone needs to just create 32 team league, etc. etc. all the rules of the NFL with fake teams, coaches & players with a paint tool to mod everything to NFL. People would try it out if it was a good enough game and you could get all you needed with a good dynasty mode and online dynasty. People would create the rosters, make the teams, etc. Then download them from the server. What makes this even better is you can add things that the NFL doesn't want in their game like conference realignment, expansion teams, 4 divisions of 8 instead of 8 divisions of 4, etc. etc.

Great point.

[Kaiser Wilhelm]

Quote: Originally Posted by PatriotJames

I'm sick of is this a monopoly or isn't it? Is this that or is it this? We shouldn't be sticking up for EA as gamers or whatever the courts/law says is right. We should rally together to take down EA for the better of the GAMING INDUSTRY! I highly doubt everyone wants 1 NFL game for the rest of our lives to choose from. Think about that one. I'm 26 right now, I still don't want the only option of Madden when I'm 36, 46, etc. and I'm sure our children will think the same. Gamers deserve options, no matter the game. How many Call of Duty/Battlefield/Socom type games are there? How many companies can create an NBA game? We have options when it comes to these things in gaming. It should be no different than NFL. That's the entire point. Take me to law school and tell me how ridiculous I sound because what I say would never hold up in the courtroom. I don't care! This is freedom. The right to choose. All we have is the right to choose to buy or not and personally and I think I speak for most when I say that's not enough. Thank you for reading my rant. James

Never ever ever compare Call of Duty with Socom! EVER!

Socom is (was) an amazing state of the art thrid person shooter that actually took skill, tactics and communication and had one of the greatest communities on the planet.

Call of Duty is some arcady little kids game that requires little to no skill, no communication, no tactics and has a really bad console gaming community (though it may be larger). I left out the Computer gaming community for CoD because I have not had any CoD PC experience.

Sadly CoD somehow found its way into Socom 4 which is very depressing and infuriating. Damn you zipper.

Ok I'm done.

Ok EA is a monopoly on the video gaming market. FACT! End of story.

The real question is, if the market "Football gaming" (or whatever fancy technical terms you want to use) is the market in question. EA bought the rights of the NFL, NCAA and AFL licenses and it removed all competition from the market. I'm no lawyer and am not an expert on Sherman laws, but that to me seems fairly anti-competitive.