PORTLAND, Ore. (TheStreet) -- On the eve of its third fiscal quarter earnings announcement and just days from Super Bowl XLVIII, this should be a moment of triumph for Electronic Arts and its Madden NFL football video game franchise.
Madden NFL 25 was the third best-selling game in the U.S. last year according to NPD Group, and the first of two EA games (Battlefield 4 being the other) in last year's Top 5. EA just released its pre-Super Bowl and Pro Bowl roster updates for the game and is still bolstered by the enthusiasm for the new Sony Playstation 4 and Microsoft Xbox One consoles.
That's likely where the good news ends. When the calendar flipped to 2014, EA Sports' exclusive license from the National Football League and the National Football League players' association expired. The last time a gamer played an NFL-licensed console game with actual player names attached to it was the last time he or she fired up a copy of Take Two's NFL 2K5 -- released just less than 10 years ago.
EA was absolutely ecstatic to get exclusive NFL and NFLPA rights when entering the deal back in 2005, but the company was alone in its joy. Gamers raised on the 2K titles and games such as Tecmo Bowl hated the lack of options and filed a class-action lawsuit against EA in 2009 on the grounds that it violated antitrust laws. While the NFL has an antitrust exemption dating back to the 1960s, it doesn't extend to partners such as EA, which settled with gamers for $27 million last year.
NFL players weren't exactly thrilled with the deal, either. NFL retirees accused their union of rejecting more money from 2K Sports in favor of a deal that used their likenesses without permission. They sued the NFLPA and, eventually, took home a $24 million settlement.
Robin Antonick, a developer who helped create the original John Madden Football for personal computers back in 1988, is also seeking his cut. During the game's 25th anniversary last year, Antonick and EA celebrated by spending much of the year in court awaiting a decision on $11 million in damages awarded to Antonick. That money is still in limbo.
Meanwhile, legal pressure from former college football players who didn't see a dime from EA's NCAA Football series forced EA to stop making that Madden-like game altogether. Last year's NCAA Football '14 was the series' final installment after former college players sued both the company and the NCAA. Those ex-players now await settlements from both groups.
It's been that ugly for EA this year, and the Madden franchise has taken its share of the hits. First-week sales of Madden NFL 25 dropped 650,000 from the release of Madden NFL '13 a year prior, with Forbes video game contributor Erik Kain freely blaming the lack of other NFL titles for Madden's stagnancy.
Beyond Madden, EA took home Worst Company in America honors from Consumerist for the second year in a row last year. It beat Bank of America, Anheuser-Busch InBev, United Health Care, Comcast and Live Nation's Ticketmaster for the honor by fumbling the launch of its latest SimCity release and halfheartedly apologizing to gamers while blaming them for EA's problems. That was before Chief Executive John Riccitello stepped down and before EA released Battlefield 4 with a slew of technical problems, which slowed that title's sales significantly
All that said, EA still makes up a 30% share of Xbox One games and a 40% share of PlayStation 4 games. Also, this is a World Cup year and EA's sales of its FIFA soccer series generally spike when that event is being played. But EA still has to face video game reality that includes a 17% drop in software sales through the 2013 holiday season -- when two new consoles and a slew of new titles should have given the industry a boost.
Meanwhile, the NFL and NFLPA have made it clear that they're listening to offers for their video game business. Each has dabbled in apps and games for mobile devices in recent years and neither seems willing to tie themselves down unless absolutely necessary. EA can't be happy with all of the settlement money it's been shelling out, but it must still enjoy having a guaranteed Top 10 title such as Madden NFL in its stable each year.
The gamers want options, the NFL and its players' union want to get paid. Does EA want to commit enough resources to the latter to prevent the former? Until EA and its partners huddle up and make a decision, it's anybody's game in 2014.
-- Written by Jason Notte in Portland, Ore.
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