Economist: Gamers Taken for $926 Million Thanks to EA’s Madden NFL Monopoly

In the world of video game football, EA Sports’ Madden series has been a hotbed of controversy, especially after the brand managed to net exclusivity to the NFL license. Since then (and perhaps even before), people have alleged that each new installment is little more than adjusting a few stats and changing the number on the box.

Of course, what can anyone do about it? If you want NFL gaming, you buy Madden; there really isn’t any other choice.

It is to that line of reasoning which led Dr. Jeffrey MacKie-Mason, an economics professor at the University of Michigan, to make a claim to the U.S. District Court in San Francisco that, by his estimates, EA has collectively overcharged Madden customers between $701 million and $926 million in the years spanning 2006 to 2009.

Attorneys brought MacKie-Mason as an expert witness into a case in which Geoffrey Pecover and Jeffrey Lawrence stand as plaintiffs of a class-action suit who allege that EA used their exclusive NFL licensing deal to eliminate the rival NFL 2K series from Take-Two Interactive. The suit then charges that EA went on to exploit the competitive void left behind to raise the price of Madden to a “dramatic” degree.

From Game Politics, MacKie-Mason stated “I provide this information for the limited purpose of allowing the Court to assess in rough terms the burden on Electronic Arts in relation to the magnitude of potential damages… Under California’s antitrust statute, it is my understanding that these damages would be trebled.”

The economist reached the figures presented above by employing an estimated overcharge percentage which “ranged from 50% to 66% for the 30.04 million units of Madden sold during the 2006-2009.”

MacKie-Mason also wrote “When Take-Two was able to compete unhindered, Madden NFL’s competitive price was in the range of $19.95 to $29.95. I assume for this exercise that these would have been Madden’s prices but for the alleged [monopolistic] acts.”

As a result of these estimates, the plaintiffs’ attorneys have requested additional information for the sales of Madden dating back to 2001, a request to which EA’s attorneys have agreed, at least of those they can locate.

However, they have shown some disdain for the economist’s analysis, stating that “EA respectfully submits that Dr. MacKie-Mason’s analysis is fundamentally flawed on multiple levels. Indeed, Dr. MacKie-Mason’s estimated magnitude of damages is nothing more than pure fiction – it has no basis in fact or law…”

The Consumerist calls MacKie-Mason’s reasoning into question as well, noting that “after all, EA faces competition in its NBA and NHL titles yet still charges $60,” though they still “support his cause because it sucks that new Tecmo Bowl games aren’t allowed to simulate the Arizona Cardinals’ dominating air attack.”