EA Sports May Lose Exclusive NCAA License: What Does It Mean?

There's a fair bit of Internet panic about the idea that EA Sports' parent company's settlement of a class-action lawsuit about price fixing related to its NCAA Football and Madden NFL franchises, which was enabled by exclusive licenses with the NCAA and the Collegiate Licensing Company and the and NFL and NFL Players' Association. Here's what's really going to change: not much.

[Disclosure: EA Sports has partnered with SB Nation.]

Though there's probably going to be a bit of money available to consumers who bought EA Sports games in the last five years, the most important takeaway from the proposed settlement to the lawsuit is this:

It also stipulates that EA will not sign an exclusive license arrangement with the AFL for five years and will not renew its current agreement with the NCAA, which expires in 2014, for at least five years.

No one cares about that AFL (Arena Football) license, because EA hasn't put out an Arena Football game since 2007's Arena Football: Road to Glory on the PS2, and sales of it were anemic at best. But the NCAA Football series is one of EA's best sellers, and, the lawsuit alleged, partly so because no one else in the marketplace was even legally allowed to sell a competing product.

That may be true, but EA's not just going to chop off the head of one of its golden geese because it may no longer be the only game on the market. The exclusive agreement the company has runs through 2014, likely covering the to-be-released-in-2014 NCAA Football 14, if not the 15 edition of the game, so there's no reason to think 14 won't come out. But what reason is there to think another game developer wants to get in the ring with EA Sports on college football?

Games on the current console generation (Xbox 360 and PS3) are time-consuming and expensive to develop, usually running well into the high eight digits, and that's with experienced developers working off established frameworks. No game company has legitimately competed with EA in the football sim market for the better part of a decade, and even the beloved NFL 2K series never really outsold Madden, despite better reviews and a lower price point. The barrier to entry for even the biggest non-EA company is massive, and the return on investment, which relies on the idea that a company's going to create both a better and more appealing game than the very good NCAA Football team can produce in the two years between now and the summer of 2014, is low.

Remember, there aren't exclusive licenses for NHL or NBA titles, and yet there's a clear winner in those two categories and MLB (Sony's MLB: The Show series, which has thrived as a first-party product despite 2K Sports holding an exclusive license on multi-platform MLB games, and EA's NHL and 2K Sports' NBA 2K series), with the winners being so good in the NHL and NBA categories that second place competitors have literally stopped producing games, and that EA Sports' failed rebranding of its NBA Live series as NBA Elite was so bad that the series took a year off and is reverting to its original name. The loss of an exclusive license and the threat of competition, likely to never be realized, is not going to be much more than a pinprick to the EA leviathan, because leaders tend to stay ahead in the sports video game field.

Now, that lawsuit in which former college athletes charge that game makers have profited off their likeness for years? Worry about that one.

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