EA Drops the Layoff Hammer

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  • Cebby
    Banned
    • Apr 2005
    • 22327

    #31
    Re: EA Drops the Layoff Hammer

    Originally posted by luv_mist
    I can't see how people think that the licenses made them more money than they would lose. They paid out for the licenses while at the same time loss more sales.
    The NFL was taking the bids for Madden.

    If EA didn't buy the exclusive license, their sales would be abysmal. It may not have made them more money than before, but it made them more money than not acquiring the license.

    The declining sales probably have far more to do with the Xbox alone more American consoles sold than the 360 and PS3 combined. The PS2 probably has 3 times the amount sold.

    Comment

    • bkfount
      All Star
      • Oct 2004
      • 8467

      #32
      Re: EA Drops the Layoff Hammer

      Originally posted by luv_mist
      I can't see how people think that the licenses made them more money than they would lose. They paid out for the licenses while at the same time loss more sales. In all honesty, it's amazing because it's another year for Madden fans and they're still falling off of the bandwagon.
      EA had to pay for the license, as the NFL was making it exclusive. Perhaps they pushed the NFL for it, but by all accounts, the NFL made it open to the highest bidder, not necessarily just granting it to EA. EA has so much time and money invested in Madden over the years, that they had to get the license no matter what.

      People want to point to the perceived drop in quality or staleness on the drop in Madden sales, but the hardware switch from the ps2 to ps3/360/wii didn't helped either. There's still not enough ps3/360 owners to match the ps2 in its sales prime, and they've really whiffed on the Wii. It's always going to be hard for a company to match sales it had just on the ps2 when there's less consoles out there.

      Comment

      • rudyjuly2
        Cade Cunningham
        • Aug 2002
        • 14815

        #33
        Re: EA Drops the Layoff Hammer

        Originally posted by luv_mist
        I can't see how people think that the licenses made them more money than they would lose. They paid out for the licenses while at the same time loss more sales. In all honesty, it's amazing because it's another year for Madden fans and they're still falling off of the bandwagon. They even created the Head Coach franchise which I'm sure didn't get enough sales to offset what they loss with the Madden fans. Don't forget the advertising that they had to put in for Madden each year. EA needs to cut some of the suits that are costing them their creativity and continue to push the "freedom" aspect of their game making.

        They also need to stop getting caught in the yearly releases. It's going to seriously be the downfall of them. They need to got to the drawing board and look long & hard at what is missing. Honestly, there are still games that they are releasing that are coming out. Anything Bioware touches will be solid. Remember Mass Effect is coming. Maybe they should have tried harder to gain Take2........
        Anybody that thinks Madden isn't making EA tons of money is kidding themselves. The sales have declined but they are still making tons of cash. Madden will still sell at least 4 million games across every platform. The exclusive license will guarantee that. If people want their NFL fix, they will continue to buy Madden.

        I don't see how you cannot see the future risk of allowing 2K to continue making football games to EA. EA was the king of every sport before 2K came along. NBA Live lost that crown years ago. Last year, NBA 2K9 sold 740,000 games vs. only 430,000 games for Live 09. NCAA Basketball 09 only sold 60,000 games while CH2K8 has sold almost 400,000 over its lifetime. The same isn't true for hockey where EA's NHL series outsold 2K by almost a 3:1 margin last year as the 2K series quality has fallen off. Clearly the public has shown a willingness to gravitate to the better product over time. How can you say the same thing wouldn't happen with the 2K football product? For all we know, 2K10 might have sold 3+ million copies at full price and Madden 2 million without an exclusive license. By simply paying an extra $5+ per game, EA ensured that no competitor would hurt its sales - only a lack of quality. In that scenario the exclusive license would have made EA a fortune.

        The Head Coach franchise was created by EA but the NFL wanted it. From what I understand (behind the scenes) the NFL actually pushed EA into making this product.

        And yearly releases are not a downfall to their product. Unless you think you can MORE than double the sales by going to a bi-annual release, annual sales will be the norm for sports games as it generates the most profit. It just won't change.

        Comment

        • DrJones
          All Star
          • Mar 2003
          • 9108

          #34
          Re: EA Drops the Layoff Hammer

          Originally posted by rudyjuly2
          The fact that they didn't increase the sales much AND had to pay an extra $60+ million per year for the licenses could lead one to say this deal costs them money and was bad.
          At no point would it have been an extra $60M per year. All licensed sports games pay royalties to the leagues/player unions. What the exclusivity deal did was exchange royalties (the NFL receiving x% of every unit sold) for a flat rate (the NFL receiving x$ regardless of number of units sold).
          Originally posted by Thrash13
          Dr. Jones was right in stating that. We should have believed him.
          Originally posted by slickdtc
          DrJones brings the stinky cheese is what we've all learned from this debacle.
          Originally posted by Kipnis22
          yes your fantasy world when your proven wrong about 95% of your post

          Comment

          • rudyjuly2
            Cade Cunningham
            • Aug 2002
            • 14815

            #35
            Re: EA Drops the Layoff Hammer

            Originally posted by DrJones
            At no point would it have been an extra $60M per year. All licensed sports games pay royalties to the leagues/player unions. What the exclusivity deal did was exchange royalties (the NFL receiving x% of every unit sold) for a flat rate (the NFL receiving x$ regardless of number of units sold).
            You are right. The extra fee was much less which is the point I was trying to get across originally lol.

            Comment

            • DrJones
              All Star
              • Mar 2003
              • 9108

              #36
              Re: EA Drops the Layoff Hammer

              Originally posted by grunt
              So, in less than five years EA turned their cash cow into a product that may not even break even. The 60 million over head is a gigantic weight for any product and that is not including the ESPN deal.
              As I said, it's not 60 million overhead. That would be implying that the NFL wasn't receiving any money from Madden sales before the exclusivity deal, which of course isn't true. Is the NFL making more money per year than they did pre-deal? Yes, that's why they wanted it. Is it $60M more? No. I'm guessing it's half that at most.
              Originally posted by Thrash13
              Dr. Jones was right in stating that. We should have believed him.
              Originally posted by slickdtc
              DrJones brings the stinky cheese is what we've all learned from this debacle.
              Originally posted by Kipnis22
              yes your fantasy world when your proven wrong about 95% of your post

              Comment

              • DrJones
                All Star
                • Mar 2003
                • 9108

                #37
                Re: EA Drops the Layoff Hammer

                Originally posted by rudyjuly2
                The Head Coach franchise was created by EA but the NFL wanted it. From what I understand (behind the scenes) the NFL actually pushed EA into making this product.
                This is part of the contract, yes. Under the terms of the deal, EA is required to ship x titles on x platforms per year, or face VERY stiff penalties. Same with 2K's deal with MLB.

                Originally posted by rudyjuly2
                And yearly releases are not a downfall to their product. Unless you think you can MORE than double the sales by going to a bi-annual release, annual sales will be the norm for sports games as it generates the most profit. It just won't change.
                This is correct. A two-year cycle would greatly benefit gamers (better games) and dev teams (less stress, fewer hours, more satisfaction in producing a better game), but it's death to publishers. I don't see this ever changing.
                Originally posted by Thrash13
                Dr. Jones was right in stating that. We should have believed him.
                Originally posted by slickdtc
                DrJones brings the stinky cheese is what we've all learned from this debacle.
                Originally posted by Kipnis22
                yes your fantasy world when your proven wrong about 95% of your post

                Comment

                • DrJones
                  All Star
                  • Mar 2003
                  • 9108

                  #38
                  Re: EA Drops the Layoff Hammer

                  And you guys realize that 2K drastically lowering their prices prompted the NFL to negotiate exclusivity in the first place, right? Like EA, 2K was paying the NFL a percentage per unit sold. Obviously x% of $20 is worth less to the NFL than x% of $60 UNLESS NFL 2K sold 3x as many units as they would at full price WITHOUT cutting into Madden's unit sales. The last thing the NFL wanted was for EA to follow suit and lower prices to remain competitive. See what I'm getting at?
                  Originally posted by Thrash13
                  Dr. Jones was right in stating that. We should have believed him.
                  Originally posted by slickdtc
                  DrJones brings the stinky cheese is what we've all learned from this debacle.
                  Originally posted by Kipnis22
                  yes your fantasy world when your proven wrong about 95% of your post

                  Comment

                  • grunt
                    Banned
                    • Jul 2002
                    • 9527

                    #39
                    Re: EA Drops the Layoff Hammer

                    Originally posted by Cebby
                    So?

                    GM was the #1 seller for about 70 years and fell to #2 in 2008.
                    and if you believe the only problem with GM was labor issues then we have to disagree. The quality wasn't there in their car division for almost 40 years and the more quality product ate up their market share.

                    I don't blame EA for the exclusive license but I do blame EA for the lack quality in their football games.

                    PS

                    Madden 10 is heading the correct direction.

                    Comment

                    • grunt
                      Banned
                      • Jul 2002
                      • 9527

                      #40
                      Re: EA Drops the Layoff Hammer

                      Originally posted by DrJones
                      And you guys realize that 2K drastically lowering their prices prompted the NFL to negotiate exclusivity in the first place, right? Like EA, 2K was paying the NFL a percentage per unit sold. Obviously x% of $20 is worth less to the NFL than x% of $60 UNLESS NFL 2K sold 3x as many units as they would at full price WITHOUT cutting into Madden's unit sales. The last thing the NFL wanted was for EA to follow suit and lower prices to remain competitive. See what I'm getting at?
                      Do you have a source?

                      Comment

                      • grunt
                        Banned
                        • Jul 2002
                        • 9527

                        #41
                        Re: EA Drops the Layoff Hammer

                        Originally posted by DrJones
                        As I said, it's not 60 million overhead. That would be implying that the NFL wasn't receiving any money from Madden sales before the exclusivity deal, which of course isn't true. Is the NFL making more money per year than they did pre-deal? Yes, that's why they wanted it. Is it $60M more? No. I'm guessing it's half that at most.
                        So, you are saying that EA paid 150 million more dollars for an exclusive license that didn't add any value to their product. Madden quality went down after the exclusive deal which imo caused severe damage to the Madden brand.

                        Comment

                        • DrJones
                          All Star
                          • Mar 2003
                          • 9108

                          #42
                          Re: EA Drops the Layoff Hammer

                          Originally posted by grunt
                          Do you have a source?
                          You mean, aside from well-placed people at EAC? I'm not naming names, if that's what you mean.
                          Originally posted by Thrash13
                          Dr. Jones was right in stating that. We should have believed him.
                          Originally posted by slickdtc
                          DrJones brings the stinky cheese is what we've all learned from this debacle.
                          Originally posted by Kipnis22
                          yes your fantasy world when your proven wrong about 95% of your post

                          Comment

                          • DrJones
                            All Star
                            • Mar 2003
                            • 9108

                            #43
                            Re: EA Drops the Layoff Hammer

                            Originally posted by grunt
                            So, you are saying that EA paid 150 million more dollars for an exclusive license that didn't add any value to their product. Madden quality went down after the exclusive deal which imo caused severe damage to the Madden brand.
                            I'm not sure what you're getting at. They obviously thought they were adding value to their product by eliminating 2K as a competitor and, more importantly, prevent 2K from doing the same to them. The overriding goal, of course, was to cause EA stock to spike (which it did) so that major stockholders could make a ton of money (which they did). I doubt if anyone at EA (well, among the decision makers, anyway) believe that Madden's drop in sales has anything to do with declining quality of product.
                            Originally posted by Thrash13
                            Dr. Jones was right in stating that. We should have believed him.
                            Originally posted by slickdtc
                            DrJones brings the stinky cheese is what we've all learned from this debacle.
                            Originally posted by Kipnis22
                            yes your fantasy world when your proven wrong about 95% of your post

                            Comment

                            • Cebby
                              Banned
                              • Apr 2005
                              • 22327

                              #44
                              Re: EA Drops the Layoff Hammer

                              Originally posted by grunt
                              and if you believe the only problem with GM was labor issues then we have to disagree. The quality wasn't there in their car division for almost 40 years and the more quality product ate up their market share.
                              Their market share was completely irrelevant; they were losing thousands on each car sold.

                              They were #1 in sales for all but one year. Their quality had nothing to do with them failing.

                              Comment

                              • luv_mist
                                Older
                                • May 2004
                                • 9596

                                #45
                                Re: EA Drops the Layoff Hammer

                                Originally posted by Cebby
                                Their market share was completely irrelevant; they were losing thousands on each car sold.

                                They were #1 in sales for all but one year. Their quality had nothing to do with them failing.
                                who is number one now?

                                Comment

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