Judge Certifies Class-Action Football Game Pricing Lawsuit Against EA

[tlc12576]

Quote: Originally Posted by ODogg

The wealthiest company typically does win a bidding war, yes that's unfair, not illegal..oh yeah and that's business.. With that being said if anyone really thinks if the exclusive agreement hadn't happened that 2K would have kept charging $19.99 each year for their football game then they are the naive ones. That was just a way to get the game out there to get people to try it, it was not a new pricing standard for football games.

ODogg, 2k keeping the price at $19.99 or not really doesn't matter that much. What is important is that whatever 2k would have set the price at EA would probably follow a similar path to compete.

Since EA already demonstrated the price of NFL 2k effected their selling price for Madden, it is a compelling argument. Even if NFL 2k6 would have been priced at $52.99 on 360 and PS3, that's potentially $7 per game EA might of loss and consumers saved, from lowering Madden to compete.

Probably the biggest argument being made is, since EA could afford to sell Madden for such a low price in 2004, that now even without competition, $59.99 is too high a price point. The other games that are being sold are not relevant because there is not a similar instance of price being lowered and than raised back after competition was eliminated.

I even go as far to say that how or why the competition was eliminated isn't central to this case either. Look at NBA 2k and NBA Live, if last year, NBA Live 10 would have sold for $29.99 and NBA 2k 10 lowered their price to compete. Then, after EA announced they were not releasing a NBA game this year, NBA 2k 11 was priced back up, I think the same claim could be made in that situation.

By lowering the price of Madden so drastically due to competition, EA might have unintentionally showed that its' suggested retail price is not fair market value. So even though it makes sense that NFL 2k wouldn't have stayed that cheap, the bigger point being made in this case is, what actually is fair market value for a NFL game.

[Critical Kills]

Again, when a competitor lowers a price you often do so to match, that does not mean that's the new price from there on out nor does it mean that you've "exposed" yourself to being able to sell it at a lower price. EA lowered the price simply because they had to in order to compete. That may mean they were making very little to no money on Madden but had to lower the price to retain customers. This is no different than Amazon lowering the price on their video games to compete when Best Buy has a sale in order not to lose customers.

The real crux of the argument is that the price went back up after the competition was eliminated. However EA did not eliminate the competition, they had no way to do so on their own, the NFL eliminated it. And it makes perfect business sense to raise the price to the industry accepted standard once there was no reason to keep the price artificially low, since there was not a direct reason to keep it low. EA did not raise it above the industry accepted standard.

There simply is no blame here to be had on EA's part, they used sound business principles in how they lowered and raised their prices. Sure one can argue that theres an appearance here of some sort of impropriety but an analysis of the situation shows that the NFL simply chose to go with an exclusive agreement and thus the entire "competition eliminated directly relates to the price change" is not a valid argument.

[roadman]

Quote: Originally Posted by tlc12576

ODogg, 2k keeping the price at $19.99 or not really doesn't matter that much. What is important is that whatever 2k would have set the price at EA would probably follow a similar path to compete. Since EA already demonstrated the price of NFL 2k effected their selling price for Madden, it is a compelling argument. Even if NFL 2k6 would have been priced at $52.99 on 360 and PS3, that's potentially $7 per game EA might of loss and consumers saved, from lowering Madden to compete. Probably the biggest argument being made is, since EA could afford to sell Madden for such a low price in 2004, that now even without competition, $59.99 is too high a price point. The other games that are being sold are not relevant because there is not a similar instance of price being lowered and than raised back after competition was eliminated. I even go as far to say that how or why the competition was eliminated isn't central to this case either. Look at NBA 2k and NBA Live, if last year, NBA Live 10 would have sold for $29.99 and NBA 2k 10 lowered their price to compete. Then, after EA announced they were not releasing a NBA game this year, NBA 2k 11 was priced back up, I think the same claim could be made in that situation. By lowering the price of Madden so drastically due to competition, EA might have unintentionally showed that its' suggested retail price is not fair market value. So even though it makes sense that NFL 2k wouldn't have stayed that cheap, the bigger point being made in this case is, what actually is fair market value for a NFL game.

Do you mean fair market value for a NFL game that paid handsomely for the license? If EA lowers the price, that is less dollars for R&D and stockholders jumping ship because of lower profits.

It doesn't become a question of fair market value when your dealing with stockholders.

[Critical Kills]

Not to mention that once EA signed the exclusive deal they then had a massive amount of money to pay which would be a very legitimate justification for raising the price of their game, to recoup those moneys.

[illwill10]

^^
exactly . if they continued to sell at $30 with the exclusive deal, They would not gain alot of profit. We would get many excuses where "we could not add "X" feature or cant afford more staff because we dont have alot of money or resources"

[tlc12576]

Quote: Originally Posted by roadman

Do you mean fair market value for a NFL game that paid handsomely for the license? If EA lowers the price, that is less dollars for R&D and stockholders jumping ship because of lower profits. It doesn't become a question of fair market value when your dealing with stockholders.

Quote: Originally Posted by ODogg

Not to mention that once EA signed the exclusive deal they then had a massive amount of money to pay which would be a very legitimate justification for raising the price of their game, to recoup those moneys.

I would think this is what EA will argue in the case and is a good point. However, that are both good points and that's probably why the judge certified it. LOL

Odogg, you have been saying the suit has no validity and/or makes no sense but it does. An American company can NOT just set the price to whatever they feel like and sell it in a cornered market. That would be price gouging and that's illegal. They have to sell the game at fair market value and the suit is alleging that $59.99 is not fair market value for Madden and is using its' price drop the last time the market was competitive as the basis for their claim.

Case still has to be decided but all thing s considered, BOTH make for compelling argument. I can see the logic in the suit and apparently so did a judge, so Odogg, you should stop claiming it doesn't make any sense and companies can do whatever they want. LOL

[Critical Kills]

They're not just setting the price to whatever they like, they've set the price to the commonly accepted industry standard which is $59. If they were charging $89.95 then the case you speak of, that they're setting the price to whatever they desire, would have some validity. It really doesn't make any sense whatsoever. And yes companies can do whatever they want so long as they aren't breaking any laws, that includes setting the price to whatever they want and if it doesn't sell then they'd be forced to lower it. That's how capitalism works, companies set a price they believe the market will bear and then adjust it as is necessary. In this case EA has not only not price gouged the market on their exclusive product when, truth be told, they probably could set the price higher and it would not be breaking any laws and would still sell well.

[khaliib]

I just don't get it.
Why try the legal route, when there's another way.

A developer makes a football game with full customization (combo of NBA 2k11/Backbreaker) and they don't have to shell out money for a license or player likeness.

The first thing people do when they get a game is editing. Whether ratings, sliders or uniforms, it all depends on what editing features are open to them to use.

"Focus on the engine (gameplay), provied the body (presentation/franchise/online), give us some paints (full customization) and the gaming community will color it how they like it."

If I want NFL, I'll make it.
If I want College, I'll do it.
Maybe Juco or Highschool, it's on the gamer.

The point to this rant, is that there is an easier way around Exclusive Licenses w/out all the drama.