One type of market that we have learned about in class is a monopoly. A monopoly is where a single organization exclusively controls a service or product allowing them to change the prices as they see fit. In this case, Madden football created by EA is in total control of the NFL video game market. EA, Electronic Arts, is a video game company that is currently ranked as the second largest game company in the Americas and Europe.
In the past, there were other NFL football games being produced such NFL 2K created by SEGA and 2K Sports which was Madden's biggest competitor. At the time, NFL 2K was selling their games for $19.99 at launch which forced EA to cut their prices to $29.95.
However, a decade ago, EA acquired exclusive rights to produce NFL and NFLPA (NFL Players Association) licensed video games on consoles. This meant that no other company could make video games with actual NFL players and teams in them unless they are EA which led to the downfall of NFL 2K. This allows EA to do whatever they please in terms of NFL video games as they have no competition at all.
As a monopoly, EA Madden is the only true NFL game that people can buy and play allowing EA to price it however they like. Along with that, EA can do whatever they want with the game as there are no other alternatives. This includes a price of $59.99 on the game compared to their $29.95 when NFL 2K was around. There are also plenty of multiple micro-transactions which players are incentivized to buy. There are also cases where EA fails to fix any glitches/bugs in their games instead of listening to what their consumers have to say. Another interesting fact is that EA Madden does have the potential to be a monopoly for a long time given their circumstances. EA has way more than enough money to continue their exclusive rights with the NFL. The NFL also doesn't care for who can make the game as long as they receive a lot of money, therefore it would be harder for any other game company to compete with EA head to head.
Therefore, EA's Madden fits the definition of a monopoly given the fact that they're able to change market prices as they see fit shown by their increase in price. Their market is also extremely hard to enter given EA's exclusive contract with the NFL.
Works Cited:
https://www.vice.com/en_us/article/nnqynz/maddens-exclusive-nfl-deal-is-a-monopoly-that-makes-everything-worse
https://en.wikipedia.org/wiki/Madden_NFL
https://kotaku.com/5314758/economist-says-eas-madden-monopoly-has-cost-gamers-almost-1-billion
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I find it interesting that EA was able to buy the executive rights for NFL and NFLPA games, although it is good business from EA. Of course, the user wants to feel like they are connected to their favorite sports players that they idolize, and they would be able to do this best through EA's games that uses real NFL players. This gives them a huge advantage over other games like 2K, and will easily strip away their business through having this upper hand. Although there are many football video games out there, it appears that Madden may be turning into a monopoly through their control an power over the industry.
ReplyDeleteAs I used to be a big Madden player, I can easily see EA's Madden Monopoly and how it has changed the football video game scene. Popular games like NFL Blitz taken off the market just because of this contract EA has with the NFL. When they hold basically the only football game on the video game market, it forces people to play their game and buy it for whatever price they are selling it for. Like you said, the game was once $30 because they had competition, but once they got rid of that, they bumped it back up to $60. Madden releases a new game every year at this price although there aren't many major differences between the games, hence why I have stopped purchasing Madden.
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