Take-Two's Football Game Could Draw Flag

User-generated likenesses of unlicensed players might raise the ire of the NFL.
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Two years ago, when video-game maker

Electronic Arts

(ERTS)

signed an exclusive five-year licensing agreement with the National Football League, it incensed rivals and cemented EA's position as the market leader in the cutthroat sports games business.

EA's move hit competitor

Take-Two Interactive

(TTWO) - Get Report

especially hard. Take-Two had been distributing its own line of football games at prices far below those of its rival.

But Take-Two has stayed in the game with an interesting customization feature in its just-released football game, which could set it up for a backlash from both EA and the NFL.

A

video clip on the popular Game Trailers site highlights a customization feature in Take-Two's new

All-Pro Football 2K8

that comes close to thwarting the spirit of the licensing deal between EA and NFL Players, a subsidiary of the NFL Players Association.

The customized clip, which wasn't produced by Take-Two, features a left-handed black quarterback named Vick wearing jersey No. 7 -- a strong resemblance to Atlanta Falcons star quarterback Michael Vick -- playing alongside football legends who are licensed for the game.

But the "real" Michael Vick is a part of EA's game,

Madden NFL 08

, the officially licensed NFL video game in the market.

Like many sports games,

All-Pro Football 2K8

features a customization mode that allows users to make selections from a variety of logos, uniform designs, team names and colors.

Sports licenses are a big business, with game companies paying top dollar for official use of a league and current players. EA hasn't disclosed how much it paid for the exclusive deal with NFL, but a

New York Times

article estimated the contract to be worth $300 million.

Take-Two contends that the character in the

All-Pro Football 2K8

clip is not an exact likeness of Vick and offers just a generic resemblance to the quarterback.

(Vick is currently battling charges that he and three other men were running an illegal dog-fighting ring. He has denied direct involvement in the fights that took place on his property. The NFL ordered Vick on Monday not to report to training camp with the Atlanta Falcons.)

"From an individual standpoint, having a Vick-like character in a game is not a problem," says Bryan Wiedey, who has worked for Maddennation.com and SportsGamer.com, sites that specialize in sports video-game coverage. "But at the same time, it is confusing if someone were trying to make a decision on which game to buy."

It also raises questions of whether the clip could push the NFL or the players' union to tighten its licensing policies around video games and user-created content. NFL Players did not respond to a request for a comment.

Customization in games isn't a new feature. Most sports video games, including other EA titles

NBA Live 06

and

NHL 06

, offer users the option to create their own characters.

The lure of customization, say experts, is that it allows gamers to create likenesses of themselves or their friends and have those characters interact with the sports' biggest names.

But as the Game Trailers clip shows, the potential exists for gamers to create virtual likenesses of current players.

Shares of Take-Two were recently up 21 cents, or 1%, to $20.16 in recent trading. Shares of EA were off 65 cents, or 1.2%, to $51.20.

Take-Two's customization feature shouldn't be a threat to EA, says Billy Pidgeon, an analyst with IDC.

And as long as Take-Two is clear about potential intellectual property infringement in its user license agreements, the company cannot be held liable for the customizations, says Pidgeon.

"This is not a threat to EA or Madden," says Pidgeon. "It could be possibly a threat to the NFL, and I am sure they will have their lawyers look at this."

Madden NFL 08

is set to release this fall, while Take-Two launched its

All-Pro Football 2K8

last week.

All-Pro Football

includes 240 of football's greatest players, such as Joe Montana, Jerry Rice and Reggie White.

All-Pro Football

is already in the spotlight for its

inclusion of O.J. Simpson in the game and a third-party-created clip that showed a hooded mascot with a large knife after a touchdown by Simpson.

Ironically, Game Trailers itself says that although it has a Vick look-alike in the

All-Pro Football

video game, true gamers can spot the difference.

"You can see he doesn't play like Michael Vick in the game," says Shane Satterfield, editor-in-chief of Game Trailers, referring to the look-alike that is in the trailer on the site. "Just slapping a number on a guy in a game and calling him Vick doesn't make him that player, because his speed rating and attributes are different."

And that's what rival EA is likely to count on to draw fans to its game,

Madden

, with rights to the players that can include ratings based on skill categories such as speed, strength and throwing accuracy -- qualities that users playing the video game are really looking for, says Satterfield.

What's more, creating players through customization isn't easy. Picking the right facial characteristics, team colors and jersey could take at least 15 minutes for every player. Building a roster of players would just be too much effort, and gamers will prefer to buy the games that have official licensing agreements, says Satterfield.

"It's just not practical to create many new players, and it shouldn't be a licensing issue for anyone," he says.

Take-Two also restricts the creation of customized players to 20 for each game played.