Xbox live activity November 09

[Only1LT]

Quote: Originally Posted by roadman

One last question from me on this whole thing. Where are you arriving at the $500 million dollar figure? Is this public knowledge or something that was pulled from out of a hat from a gaming internet source? I don't think the public knows exactly what the amount is. I'm hearing from an ex-EA employee is close to $15 million per year. So, that would put it at currently $150 million up to this point. I'm more inclined to go with an ex employee of EA's vs some source over the internet. All I'm saying the $150 million is much less than the $500 million that you are portraying. In the end, though, a loss is a loss. If you factor in $15 million a year on expenses vs $100 million/yr, the loss is much less on the balance sheets. Also, you need to remember that EA's stock soared after the deal was made. I'm assuming some people made a lot of money when that happened.

I had seen that number in an article before. I will try to dig again to see if I can find it. I don't think the exact dollar amount was ever released, but there have been some leaks that hinted at that number. Again, I will check again, but as you said it doesn't matter. Whether it is $500mil, or $150mil, there is no question that it is more than they were paying for the non exclusive license. So if you are spending more to produce the title, and a huge part of that increased spending went to eliminating competition, with the expectation that your sales would increase exponentially and that it would offset the extra cost, and make your product even more synonymous with Football, being that it is the only NFL game (and NCAA game, let's not forget that either) and after all that your sales not only don't stay at static levels, but decline year after year, well... do I really need to finish this run on sentence or has this point finally been driven home and beaten to death, and then taken out back, and shot with a 12 gauge?

[Only1LT]

Quote: Originally Posted by ODogg

my guess is it's like anything else, it's not really cool to be into sports games anymore, nowadays it's all about the cod's, l4d's and dragon ages of the world. i mean like i said, madden has been around so long by now most folks with limited income are just not buying it every year, it's not rocket science really. I don't know much that EA can do either to fix it. madden 10 is worlds better than 09 but it's not caught the world on fire. i think maybe madden is like classic rock, for a while no one gave a crap about it anymore and now it's back into fashion. sometimes a product (or a person) just has to get out of the mainstream for awhile before it can get back into popularity and this right now is madden and sports games time to ride in the proverbial backseat for a while.

Be careful. Just like you have said to alliance over and over that he can't say that people are fed up with the game like he is, you can't say that it is universally accepted that 10 is worlds better than 09. I don't think it's that much better than 09. After 20 years of Madden, I think I am in a position to say that most Madden games, play very largely... like Madden. 10 is better than 09 in my opinion, but something that has as much in common with it's predecessor as it does, would be hard pressed to be world's better. I would wager that there are plenty of people that don't think it's world's better either.

And is it that it isn't cool to be into sports games anymore, or are there no cool sports games to be into? Chicken or the egg?

[roadman]

Quote: Originally Posted by Only1LT

I had seen that number in an article before. I will try to dig again to see if I can find it. I don't think the exact dollar amount was ever released, but there have been some leaks that hinted at that number. Again, I will check again, but as you said it doesn't matter. Whether it is $500mil, or $150mil, there is no question that it is more than they were paying for the non exclusive license. So if you are spending more to produce the title, and a huge part of that increased spending went to eliminating competition, with the expectation that your sales would increase exponentially and that it would offset the extra cost, and make your product even more synonymous with Football, being that it is the only NFL game (and NCAA game, let's not forget that either) and after all that your sales not only don't stay at static levels, but decline year after year, well... do I really need to finish this run on sentence or has this point finally been driven home and beaten to death, and then taken out back, and shot with a 12 gauge?

No, you don't. I'm just pointing out the fact that a difference in $85 million/year is significant when you apply it to ledgers and balance sheets.

If you want to look up the source of $500 million, that's fine, but I'll take the word of an ex-EA employee over some gaming or news site.

[Tyrant8RDFL]

Quote: Originally Posted by Only1LT

No I wouldn't call that disappointing at all. The linchpin is the exclusive. If you sell less than you did in 2005 but you don't have to spend $500mil, and you are competing in a marketplace with other rival Football games? That's good. Paying $500mil to eliminate all competition and you sell less than when you had competition and you didn't have to spend anywhere near $500mil to do it? Well that is just about the worst business decision that you could make. That's all I'm saying.

I agree with this all the way.

Quote: Originally Posted by roadman

One last question from me on this whole thing. Where are you arriving at the $500 million dollar figure? Is this public knowledge or something that was pulled from out of a hat from a gaming internet source? I don't think the public knows exactly what the amount is. I'm hearing from an ex-EA employee is close to $15 million per year. So, that would put it at currently $150 million up to this point. I'm more inclined to go with an ex employee of EA's vs some source over the internet. All I'm saying the $150 million is much less than the $500 million that you are portraying. In the end, though, a loss is a loss. If you factor in $15 million a year on expenses vs $100 million/yr, the loss is much less on the balance sheets. Also, you need to remember that EA's stock soared after the deal was made. I'm assuming some people made a lot of money when that happened.

I have also seen the figure of 500 million that EA paid for the license fee. I think if it is as low as you mentioned many would have battled EA for the license. At 500 million not anyone company could compete.

I'll see if I can dig it up. Shouldn't be to tough.

[Tyrant8RDFL]

This is what I found. Nothing was really ever confirmed as a exact figure , but the 500 million mark was speculated.

Here is a quote from the article, and I also provided a link if your curious on reading the entire article

"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."

Link to the Article
http://money.cnn.com/2004/12/14/comm...column_gaming/

Now this was the 1st deal. Which was done in 2004 and was to lsat till 2009.

Now EA received and extension that will last till the 2012/2013 football season. What was paid for that extension was not revealed.

The NFL is greedy, so I'm guessing if 5 years was roughly 300 million. That would have had EA paying about 60 million a year for 5 years. I really can't see the NFL dropping the price down to 15 million a year, but that is just my opinion, and no one outside of the deal really knows.

[roadman]

My bad, it's not the $150 million that I've been reporting, it's doubled that to $300 million.

It would put it at $60 million per year.

It's post number 15 in this thread I'll link. If you read further with his posts, he delivers information that I didn't even know about the deal.

http://www.operationsports.com/forum...post2040436765

[Tyrant8RDFL]

Wow this is crazy. In this article they disclose some figures that direct TV paid the NFL for exclusive rights for the Sunday ticket.

Here is one quote from the article

"Even back in 2004 when DirecTV paid $400M for the rights to Sunday Ticket it was largely seen as a wash. The exclusive led to rooftop installations for customers who otherwise would have stuck with cable. Time Warner (TWX) and Comcast (CMCSA) have no competing product. Further, those same cable companies were in a squabble with the league over the NFL Network. Pricing for the network led to cable providers dropping the channel. That left diehard fans who wanted 24 hours of coverage further motivated to put up the dish."

Here is another quote on what Direct TV paid on the extension. Be warned this figure is out right SCARY and INSANE.

"The deal DirecTV signed in March was for four years, a billion dollars per year. Sounds like DirecTV can't survive without the NFL, and that should have given Apple leverage at the bargaining table. Apple has billions in cash they could have tapped for a deal. It would have reduced what DirecTV had to pay for its coverage, but perhaps opened the floodgates for cable companies to move in."

Is that crazy or what?! 1 billion per year. I'm sorry but with the way the NFL is about making money. There is no way EA is paying 85 to 150 million for the NFL license when they worked out an extension.

Here is the link to the entire article:
http://seekingalpha.com/article/1575...on-an-nfl-deal

[Only1LT]

Quote: Originally Posted by roadman

My bad, it's not the $150 million that I've been reporting, it's doubled that to $300 million. It would put it at $60 million per year. It's post number 15 in this thread I'll link. If you read further with his posts, he delivers information that I didn't even know about the deal. http://www.operationsports.com/forum...post2040436765

You're still harping on the exact dollar amount, and for what reason I don't know why. As I said before, even if it is $150mil, it's still more than they were paying before and they are selling less, with no comp. Any way you slice it, it turned out to be a poor business decision. They misjudged the market, and they misjudged the products value. Not anymore complicated than that.