Electronic Arts Pitches Sports-Game Promotion

Feeling pressure on prices for sports video games, Electronic Arts (ERTS) is firing back.

The video-game software giant will launch a promotion next week that will award customers a free sports game for every two they buy, company CFO Warren Jenson said at an investor conference Thursday. EA will offer the promotion for "a limited time," Jenson said, but did not elaborate.

The company is attempting to balance profitability with maintaining its dominant share in the sports game market, he said.

EA's move follows Take-Two Interactive's (TTWO) attempt to carve out some of EA's share of the sports game market. Earlier this summer, Take-Two signed a deal with Sega to co-publish Sega's line of ESPN-branded sports games. The two companies are offering the ESPN games, which include football, basketball and hockey titles, at about $20 a game.

In contrast, EA typically offers its sports titles at about $50 a game.

But that price point may be weakening. Previously, EA announced that it would offer its NBA Live basketball title for about $40. And customers who take advantage of its rebate will be paying about $33 a title.

Jenson drew a number of questions about the latest pricing move from analysts and investors at the Banc of America Securities-sponsored conference, held in San Francisco. Of principle concern to many seemed to be the impact of price competition on EA's Madden football game.

Jenson tried to re-assure the skeptics: A collector's edition of Madden priced at $60 a game has nearly sold out, he said, noting that EA has sold about 2.4 million copies of the title since the company released it last month.

Jenson projected that Madden will have 70% of the share of the football game market. While that's impressive, it also is an acknowledgement that Take-Two is taking significant share, because Madden accounted for more than 90% of the football game market last year, according to analysts.