Video Game Monopoly

EA makes the most recognizable football game in the video game industry: Madden NFL. They have dominated the market for football games ever since Madden NFL was first introduced “back in the day.” Why? Madden was a better game in every way to its competitors. EA was proud of this fact, and very aggressive in keeping their game on top. Last year, they were challenged by a well know video game company, Sega. Sega, a couple of years ago, changed their business format from hardware and software, to just software. Sega is a large company with good business sense (arguably bad luck, but that is another topic). Sega saw the market for football video games and jumped at the chance for profits, and with their new focus on software, they had the ability. Their answer to EA's Madden NFL was ESPN NFL, using both the ESPN and NFL name rights. This game has been in the market for a while, but last year, with new vigor, Sega attempted to make it the first game to truly compete with Madden. They not only made a fine game, which for many people, was better than the Madden game, they reduced their prices to about half of Madden (I don't know how they were able to do so, but that is also a different issue). Well, for Sega, it worked. Their game was successful and Madden finally had a comparable rival. Just as the market is leaning towards competition, in comes the aggressive stance that EA has taken in this particular genre. That aggression has finally went too far. In December EA made its first move by acquiring a deal with the NFL for exclusive rights. That means that only EA can use players’ names, NFL logos, NFL endorsements and anything else that comes with the NFL brand name. That was already a slap in the face to its major competitor, Sega. There was even, what turned out to be rumor, talk about EA making the same move for MLB, NBA, and NHL rights. Now, EA made the final blow that is so aggressive, I view it as a personal attack on Sega. They bought the exclusive rights to ESPN, the very organization that Sega’s game is named after.

One consequence from EA’s actions, is that their competitors in the broader sports genre of video games are forced to make self preservation moves, though Sega themselves was not one of them. Soon after EA bought the rights to the NFL, another competitor made a move for exclusive MLB rights, and a follow up story hints that this deal is going through. There is also talk about the companies attempting to get exclusive NBA rights, though the NBA seems to resist this.

These actions are very controversial in the gaming community. I personally got in an argument with someone from that gaming community about the underhandedness of EA. The argument at first was about bias toward one game or the other, but it soon turned to an argument on whether or not EA is a monopoly. In comes my question: I believe that this action not only gives a certain amount of market power in the football genre of video games to EA, it is enough to classify EA as a Monopoly in this market. So, I ask, do you believe that EA should be considered a monopoly and the government intervene, or do they have the right to grab up exclusive rights deals such as they did?

Also, if EA were to be considered a monopoly, should its competitors response by securing the MLB rights be considered the same, or should it be justified as a self preservation move and given an exception (at least a temporary one)?