Comment: EA flexes its muscle with controversial NFL deal

Europe has never really embraced the American sports, which might explain why so few people here have paid much attention to the extraordinary struggle which has taken place in North America in the past six months between Electronic Arts and Take Two Interactive - one which ended with a shock announcement this week that has left much of the industry in the USA reeling.

For those who haven't been following the history, Take Two signed a deal with SEGA earlier this year which made the two companies into co-conspirators on the ESPN series of sports games, which have been the main rivals to the EA Sports pantheon for some time - albeit existing in a very distant second place to their competitor.

The new alliance produced one key idea - dropping the prices of all its ESPN titles to $19.99 in order to grab market share and put pressure on EA, which continued to stick firmly to the line that there was no need for a budget price point in the sports market. NPD sales data proved Take Two's point, though; the ESPN games gained significant ground on EA, and eventually, last month, the publishing giant was forced to drop its own prices in order to ensure that it remained on top of the field in the run up to Christmas.

It was hardly the massive defeat for EA that some commentators have chosen to characterise it as, but it was certainly a nasty knock - proving that with solid titles, aggressive pricing and good marketing, the industry leader can be challenged even on its most secure home territory. Or so we all thought - but events this week have showed that EA is not the largest publisher in the games industry for no reason, and that it's not afraid to use its size to crush competitors when they become a threat to its dominance.

A joint announcement from Electronic Arts and the National Football League revealed that EA has opened its purse strings and signed up an exclusive five year deal with the NFL and with its Players' Association, effectively locking all of the company's competitors out of making NFL games for that period - which extends well into the life cycle of the next generation consoles. The deal must easily have been one of the most expensive in EA's history, but given the prize at stake - namely the exclusive rights to the most popular sport in the USA - the stock market judged the (undisclosed) price to be worth it, and EA's share price rocketed on the news.

The move is a stunning one - a clearer and more comprehensive end to the battle with Take Two simply could not be imagined. In one fell swoop, EA has demonstrated that it is the most powerful and dangerous company in the industry, destroying its competitors product ranges with the sheer power of its wallet. Reaction to the deal, unsurprisingly, has been largely negative - however clever it may be in business terms, there's a distinct feeling that winning the sports game battle by pulling the rug out from under a competitor's feet in this way effectively amounts to bully-boy tactics on EA's part.

Take Two, in particular, is furious at the deal, pointing out in a strongly worded statement this week that the people who will suffer in the end will be consumers, who will be denied a decent choice in the NFL game genre for the next half-decade, and the NFL themselves, who may well find themselves tied to EA in a not entirely advantageous way when the deal finishes in five years time, since it's quite possible that no other publisher will be interested in picking up the reins at that point given the cost of developing a new NFL game series from scratch.

Naturally, when Take Two talks about consumer choice, what it really means is "the consumer's choice to give money to us rather than to EA," but the firm has a point regardless. This year's battle drove software prices down and, if extended for a couple more years, would probably have led to significant innovation and development in the American football game genre. While the falling prices don't help the industry much - and can't seem attractive to the NFL either, which may have provided some impetus for the EA deal - both of these now-eliminated factors are good for consumers.

Left to its own devices, with no competitors and only its own previous games to top in the quality stakes, both the pricing and the quality of the NFL games could well suffer. EA wins either way - but both the NFL and its fans may find themselves wishing that they'd seen past the software giant's chequebook and allowed the market to be driven by healthy competition, not by purchased monopoly.