Editorial: Are Payoffs Bad for the Industry and is Microsoft Paying Off EA Sports?

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Payoffs have existed in all industries for a very very long time. You can’t argue they exist, but do they do any good for the end user?

The most recent gaming related payoff centered around Microsoft and Rockstar, with a $50 million purse headed to the developer for the exclusive rights to publish two episodic packs for Grand Theft Auto IV for the Xbox 360. Many can argue this is good for gamers, but I disagree. This is good for Microsoft, and that’s about it. Rockstar will still sell the same number of copies of GTA4 with these exclusive packs as opposed to the downloads being available for multiple platforms, it’s just now the majority of copies will be for the Xbox 360. And what about the price paid? All of Take Two’s games sold on Xbox platforms have not totaled $50 million in gross sales, so how can one justify that cost? Will these downloadable episodic content packs cost gamers an arm and a leg? If history repeats itself, they very well just may.

But what about other potential payoffs? Let’s examine Microsoft again, this time with EA Sports. With Peter Moore now heading EA Sports, it’s hard to argue that there will be some favoritism shown towards the Xbox 360. But just what is happening now?

I was watching Sunday Night Football on NBC this past weekend and saw no less than 6 commercials for Madden 08. Each commercial showed users with the official Microsoft Wireless Headset and Xbox 360 controllers jumping up and down playing the next-gen football title. At the end of every commercial there was the Xbox 360 logo and a few seconds showing the price drop for the 360. Now, there would be nothing wrong with this had the game been an Xbox 360 exclusive. But it’s Madden, the most widely sold and well known multi-platform video game in the industry.

Now why would EA Sports be so inclined to give Microsoft such preferential treatment in these commercials? The answer is simple: money. Microsoft is most likely throwing money at EA to fund their development and boost sales of games for their console. And are the commercials the only things they’re paying for? This is only speculation, but the Xbox 360 is the only platform for EA Sports titles to run at 60fps. Is this coincidence or a correlation between the two events? I would personally lean towards correlating the payoffs. EA has blamed the lack of time with PS3 hardware for having Sony’s version of the game run at 30fps. I think we can effectively call shenanigans here, as many third party developers have games running at 1080p and 60fps on the PS3 (i.e. Activision with Call of Duty 4). Either EA Sports has a shoddy development team (which can be argued), or there’s something else going on here.

Let’s jump gears a bit to publishers buying development studios. We’ve seen this recently with Irrational Games, the developers of BioShock, being purchased and enveloped by 2K Games. With less and less independent developers existing in the industry, it can be argued that creativity will be stifled. Many of the great critically acclaimed games of the past few years have come from smaller studios. They have the freedom to create these games without being forced to work on more mainstream and potentially lower quality titles. Imagine now that the developers from Irrational Games (sorry, 2K Boston) will be forced to no longer work on their next big hit, but instead on rushed movie games for the next few years. This is what may happen with the larger studios buying out the smaller developers.

So what happens with all of these payoffs and buyouts? Ultimately, the gamers are ones who suffer. Look at what happens when a license becomes exclusive (i.e. NFL or MLB)… the development flattens out as there’s no competition in that field. And that’s just what will happen as payoffs and buyouts continue. Competition will dry up and money will force developers’ hands. The old adage of speak with your wallet is really the only way to let these companies know that something need to change. Sadly, I have feeling that just won’t work and the payoffs and buyouts will only become more frequent. We’ll see what happens over the next few years.

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39 Responses

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  1. You are ignorant. The PS3 games run at 30 frames per second because they don’t want to have to spend the extra resources to get the same performance as the 360. Sony screwed themselves by putting the Cell processor in it, and now many PS3 game stutter really bad which is a shame for $600. Thats why I own 2 360’s and a Wii.

  2. Keith Hickam

    This is a poorly researched article. The weak link in this article is the evidence of MS paying off EA. You don’t have any facts, or even rumors, whatsoever to establish this link – only your “most likely throwing money at EA” phrase.

    The Rockstar fact is documented through financial statements. Where’s your evidence that EA is getting lots of money from MS? EA’s a publicly traded company.

    Since 2/3 of your editorial is based on establishing this MS/EA payoff link, it’s incumbent on you as the author to do a better job of documenting this. Otherwise, why not just get a job writing for the Sony Protection Group?

  3. Pablo Neruda

    @Keith Hickam

    “Each commercial showed users with the official Microsoft Wireless Headset and Xbox 360 controllers jumping up and down playing the next-gen football title. At the end of every commercial there was the Xbox 360 logo and a few seconds showing the price drop for the 360. Now, there would be nothing wrong with this had the game been an Xbox 360 exclusive. ”

    What more evidence do you need??

  4. bella

    Wow we have a Microsoft fanboy here…. I don’t think the “Ediotial” was trying to be a research “article”. (I didn’t see any footnotes or anything) Sounds like an opinion to me and a great one at that.

  5. Ghost

    Although this article is just hearsay, I too noticed the Madden 08 commercials during the football games. If one thinks about it, there really is no logical reason why EA wouldn’t list all the platforms Madden 08 is going to be on. From a business standpoint all they are doing is cutting there sales by not informing that the game can be bought on other systems. Granted the majority of people know It’s a multiplatform game, but something like that is never assumed when these large corporations advertise their products.

  6. KingNinja

    @Keith Hickam

    I love the PS3 commercial for madden….ummm thats right they all seem to be MADE BY MICROSOFT. This is the same deal MS made for Guitar Hero… They pay to market a product as in incentive to push 360 versions. Devs take the money and kick their customers in the nuts.

  7. Ih8U

    Maybe because the 360 has the largest install base you saw the headset and 36o controllers..?????

    You need to make T-shirts that read “MS Paid Everybody Off” and run around with a tinfoil hat on your head…

    Why is MS being single out in this editorial when Sony does this same thing ALL THE TIME. Sounds like an editorial from a Sony fanboy.. hows that for conspiracy..

  8. captain fun

    I agree with Kieth, this is a poorly conceived editorial. EA is probably showing the 360 version of the game because that’s the one that is running the best. And I haven’t heard anything about the Wii or PS2 versions not running at 60 FPS, just the PS3. I’m sure next year, the PS3 version will be fine.

    In addition, if the ad shows the 360 price drop at the end of it, then microsoft paid for part of the ad. They did not pay off EA, but they may have split marketing costs. I see no problem with this, they’re both big companies and if they can both get their message across in the same ad instead of running two separate ads, why not?

    Also, please give some evidence that 2k Boston/Australia will be making movie tie-ins after bioshock. I imagine that if Bioshock sells 4 million copies like they’re projecting, that studio will be given the chance to develop whatever they want. The name change from irrational games means nothing.

    Plus, if the downloadable content packs for GTA IV are going to be expensive on the 360, then they would have been expensive on the PS3 as well (if they were offered for that platform).

    Everyone needs to stop extrapolation something out of nothing. There’s a lot of silly fanboyism and paranoia going on right now, but everyone should just relax, and enjoy the awesome lineup of games coming this fall.

  9. Pablo Neruda

    The Playstation 2 version of Madden 08 is running at 60 fps. The Playstation 2 has by far the largest user base.

    Why is only the X360 verison mentioned?

    Because the filthy rich hand of M$ is paying companies off left and right to get their console ahead.

    That’s probably close to the truth.

  10. Mandate

    @Keith Hickam

    It’s an opinionated editorial that the editor seems to have raised some valid observational points. He’s not going to write a dissertation on his opinion. It’s just an editorial, you can either agree or disagree. No needed to get your 360 in a wad!

  11. lunatic

    this is funny.. now there blaming MS for EA promoting more 360’s..i remember all EA commercials in last gen, all show nothing but love for ps2 in fact when they did the madden tournements it was on the ps2, i didn’t here ya crying about SONY paying EA..get a life SONYbotS

  12. Mandate

    @lunatic

    I doubt anyone has tears falling from their cheeks or their afraid the sky is collapsing. The editor was just making an observation in his article. It’s the same concept as various forms of media. If you don’t like the stimulus, go to something that appeals to you.

  13. Keith Hickam

    So some of you people think:

    “EA ads show people using 360’s to play Madden 08. Therefore, EA is getting a huge payoff from MS!”

    Lord. Michael Vick is asking himself, “Where were you guys when I needed you?”

    Editorial or not, there has to be some logical chain, even if there aren’t footnotes or citations. The above is all there is.

    Some basis for 2/3 of an editorial, eh? Why not just say Bill Gates had all of EA’s Outlook mail copied over and used as blackmail evidence?

    It must be true – after all, EA’s Madden 08 ads show the players using Xbox 360’s! What more proof do you need?

    I suppose EA should have been politically correct, and had one person using a 360 controller, and one person using a PS3 controller. (You could double duty that to the market-leading PS2, since from an ad it would be hard to tell the difference.) But then what about the Wii people?

  14. Pablo Neruda

    @Keith Hickam

    So you’re saying it’s a coinsidence that, although Madden is coming to most consoles, they advertise for an X360 price-cut and the only version they advertise is the X360 one. Hehe, that funny man.

    Instead of attacking the editorial, maybe you could shed some of you wisdom with us? Tell us why you think this is?

  15. @Keith Hickam – I see that you’re commenting from the Redmond Campus of Microsoft, which indicates you’re a Microsoft employee. If you’d like to have a logical discussion about this, please contact me. I would email you, but the email you used to comment is not valid. I’d love to discuss this with you.

  16. @ Keith – Come on keith lets be realistic in most game commercials the focus should really be on the game, clips of it, cinematics, etc. why focus on the ocntroller at all? Somethign tells me that wehn the stranglehold commercials comeout you wont see a guy sitting next to either console just clips of the game and then at the end available on blah blah blah. Interesting how Madden moved away form that and needs to show controllers? I think the times square bash also showed a lot of favoritism, had MS stuff plastered all over NYC promoting Madden, not one single OSNY or Wii logo to be found. Quite interesting no?

  17. If MS paid off EA Sports, good for them. It isn’t like Sony is in dire straits. Maybe Sony is conceding the sports sim market to Xbox.

    And maybe Keith Hickam should mask his IP address better.

  18. Keith Hickam

    1st: why should I mask my IP address? It’s a reflection on the mentality of some of the posters here, that they think I “neglected” to do so. I didn’t “overlook” it, because what I have to say doesn’t derive from any special knowledge – it is a observation that any logical-minded person would make.

    2nd: Whether I’m Bill Gates, Robbie Bach, or a janitor (or Jack Tretton for that matter) – what of it?

    No one has yet explained how “Xbox 360 controllers used in Madden 08 ads == MS payoff.”

    The weakness of this correlation speaks for itself. If this is all it takes to convince you – then you are truly pawns.

    The address I gave should work – it’s hosted on mail.com – just checked it – plenty of junk mail piled up from today. But, as I do not speak for MS – it is irrelevant whether I work there or what position I might hold.

    If you can’t answer the question I posed, and all you can do is create additional “facts” such as the one we’re talking about here – i.e. ad hominem attacks and innuendo – then I can see why such weak editorial content finds a popular audience. Looks like a lot of people just want to be told what they want to hear.

  19. @ keith

    Let’s suppose for a minute you are no way affiliated with MS and are just in disagreement.

    If I had bought a PS3 and not a 360 and was forced to play a far inferior product on an superior machine(I own a 360 and not a PS3 mind you), I would be livid. Both NCAA and Madden run slower and do not play as well. It SEEMS to the average person, me or you or a janitor or anyone else for that matter is that EA games as of late are much better on xbox360. You honestly believe that this is no reason for suspicion? The “Facts” in the article such as the sales numbers are real. The author did not make anything up. This is an opinion piece and it seems you are in the minority my friend.

  20. Kieth – I’ve tried emailing you, it bounces back as undeliverable. Use our contact form if you’d like to get in touch with me as I’d like to discuss further.

    As for your questions… for a multi-platform game, there is NO mention in any TV ad or the official launch party of ANY console other than Xbox 360. To make that happen, Microsoft must pay EA to be the only advertised console. If you don’t consider this a payoff, I’m not sure how else to explain things to you.

    I don’t see how any of this is “attacks”. I posted this as an editorial and you clearly don’t agree (and because of your affiliation I don’t blame you). In no way was this meant to be an anti-Microsoft rant. This was an editorial to analyze an trend that has been growing in the industry, with Madden 08 and Grand Theft Auto 4 as the biggest examples as of late. Microsoft has been the key player in these issues. If you can find me anything go against Sony of Nintendo recently, I’d be glad to talk about it. I’m not saying they’re innocent, but there’s been no news recently in their directions. I’m not a fanboy of any console or manufacturer. I do and have owned every system and enjoy them all.

    Like I said, feel free to contact me if you’d like to discuss this further.

  21. Keith Hickam

    I will send a mail from my address and see if it makes it through.

    The humorous point here is, I’m not even saying that MS didn’t pay off EA. I have no knowledge whether they did or not. That’s why my affiliation is of no import, and never was.

    I’m saying, “how can you conclude that they did based on this evidence?” All there is, is the “link” “Xbox 360’s are used in the ads, so MS is paying EA off.”

    Ever heard of Occam’s Razor? From Wikipedia: “The simplest explanation tends to be the right one.”

    Instead of evolving conspiracy theories, why not accept the most straightforward explanations? I.e.

    1) EA has had more time to learn on Xbox 360, and less time for PS3, so they still have to catch up.
    2) 360 currently has the largest market share of the 2, so EA puts more resources into it.

    Both of the above make sense, and are what EA states, and are very straightforward. Did anyone complain when the PS2 games came out sooner, and had all the marketing emphasis? PS2 had/has the larger market share! It makes perfect sense!

    Now, if the basis of the EA/MS payoff theory is “I found a line item of $100 million in EA’s financial statements for Q4 ‘07 that has no apparent source” – well, that’s not very strong evidence, but it’s at least SOMETHING.

    You can at least build a decent conspiracy theory out of that. But “360 controllers being used on Madden ads?” Only if you are preaching to the converted… that’s why I’m disappointed in the editorial. I’m guessing the Rockstar item didn’t seem strong enough by itself, but maybe one could have created a hypothetical bleak future to make one’s point.

    If I wanted sketchy logic and innuendo reported as fact, that’s what SPG is for…

  22. capodadon

    I think Microsoft probably told EA, “You wont need to pay for any commercials for Madden ‘08. The only catch is the 360 will be advertised at the end of every commercial.” Then EA (Peter Moore) said, “Sure, I love working with you guys. Cha-ching.”

  23. drunken master

    With M$ bribing developers to make games appear better or add extra content to the 360 this is clearly a sign of desparation. A company who is desparate enough to ‘bribe’ someone else is in my mind worried that their competitor has the upper hand. With M$ also bribing Paramount and Dreamworks to stay exclusive within the HD-DVD camp (as sales of blu-ray outnumber HD-DVD sales 2 to 1). PS3 has blu-ray (developers are now realising that they need extra storage space for richer environments), it has HDMI (with 30% of american households HD ready and growing) and it’s wi-fi ready. M$ slagged of the PS3 last year saying they give consumers the choice of purchasing HD-DVD, HDMI or wi-fi adaptors but now the consumer stuck with a 360 core or premium will have to upgrade! M$ are clever at business which is why they are so filthy rich. So whilst we think we are getting cheap M$ products they are infact taking from us slowly (constant upgrading), and bribe the companies so that their enemies will fall (even tho their enemies have the better know-how). Eg. Internet explorer vs netscape, Vista vs Apple tiger, iPod vs new MS ‘Zunes’, .mov (apple) vs .wmv (MS), office vs lotus.

  24. @Kieth – EA doesn’t just decide to not tell anyone about any versions of the game except Xbox 360 on a whim. They’re just sitting in a meeting and saying “let’s only showcase the Xbox 360, have their logo at the end and hype the price cut, and not tell anyone of the other 9 versions of the game.” Some money HAD to exchange hands there, whether in the form of Microsoft paying for advertising, launch parties, etc…. something is going on there. And yes, that is the simplest explanation per Occum’s Razor.

    You’re also going off on tangents now. No one is saying anything about head-starts with the PS2 vs Xbox or the 360 vs PS3. I started off by saying it was speculation, and you’ve jumped all over it in a very defensive manner.

    I added the Rockstar portion into the editorial to add more examples. I found all the Madden stuff by watching TV and going “Hmmm, something doesn’t seem right here” during the 6 commercials I saw. We also have the video of the Madden launch from Times Square posted here on the site, which prominently showcases EA and Xbox 360 logos all over the place together.

    If you can find a valid reason why there was no money exchanged in all of this advertising, I’d love to hear it. And please don’t keep saying “360 controllers in an ad”.

  25. Oh and Keith – this article doesn’t just disappoint you. If you’re disappointed in something, you don’t write 4 long comments in a very defensive manner.

  26. Keith Hickam

    But Sony wasn’t paying EA, when PS2’s were prominently or exclusively featured in the previous round of console competition. If I (or anyone else) made that assertion, would you believe me? I doubt it.

    OK. You’ve “proven” MS is paying off EA. Let the readers judge whether your chain of events is more plausible that the alternatives I offered (or any others.)

    Generally, in the justice system used by most countries (including the U.S.), the burden of proof is on the accuser, not the defendant.

    But, that’s irrelevant. I don’t have to prove that MS didn’t pay off EA, because I’m not saying that they didn’t.

    If I had been satisfied with the article, I wouldn’t have made any comments. But I suppose you wouldn’t believe that either.

  27. geniusjc

    drunk pandas must really be drunk! The ad that was mentioned was produced and paid for by Microsoft, the advertiser. They chose to run an ad for their version of Madden during a football game. That is just Microsoft choosing to be smart. They could have paid NBC to not allow other Madden commercials during the game, it’s not an EA commercial though. When you have a game system and a game is licensed to run on it you have the right to advertise that game anytime you want, it’s your frieking system. EA doesn’t have to give Microsoft permission or be paid to let Microsoft advertise it.

    These wild assumptions that the editorial is based on is crap. Yes, I know it’s an editorial and they can say what they want. It just shows how stupid the person who wrote it actually is. If you notice a drop after the buzz dies off, in reader hits to the site, don’t be too surprised.

  28. jared

    Yeah, this editorial is pretty weak. Check here for a bit of related info from a more reputable source. EA admits to prioritizing the 360 over the PS3. From the link: “With a larger installed base for Microsoft’s console, the rep said it makes financial sense to get that version of a game out first and maximize potential sales.”

    Of course their advertising would focus on the console that would make them the most money. Why would they show gameplay clips from a PS3 version that doesn’t run as smoothly as the 360 version? It wouldn’t make sense. And if the game is actually running on a 360, why would you show ppl playing a PS3?

    In any event, if what geniusjc said is true, that makes the point entirely moot.

  29. grafox

    I’m very sure i sense some xbox 360 fanboys. You have been very bias is all your comments with no argument for the other side. You guys haven’t actually given a better alternative explanation. As clearly stated, there is no reason to but the xbox in the spot light unless M$ is paying the EA marketing committee. And putting the ‘xbox price drop’ at the end of the commercial would actually cost more so why would EA spend more money when they don’t have to? Please explain to us why you think it isn’t likely M$ is paying off EA, I would love to hear what you have to say.

  30. Keith Hickam

    I’ve got a new theory. Grafix is illiterate.

    Basis? Grafox states that the “xbox 360 fanboys” don’t give an alternative explanation for the MS/EA payoff theory, and claims to want to hear what they say.

    I gave one, with neat little numbers next to one of my statements on it. Looks like geniusjc gave one too. But grafox can’t read those, even though one of them was just 1 post ahead.

    Therefore, I conclude grafox is illiterate. But wait – grafox typed in a response. This implies literacy, so my theory is shot down.

    But wait – I know how to make the theory work. Grafox must have a little brother or sister. Thus, grafox clearly dictated the response to that sibling and had them type it in. That same sibling read the thread to grafox and missed or skipped the explanation parts (because they love the PS3) so grafox never knew about them.

    That’s the reason! So my theory must be true after all! See what I mean?

  31. Serious

    It’s sad that I’m even stooping to your level to responding to this trash article because 100% of this is based on speculation, but if you took Economics 101 (which you may not have) you would understand that it is a good marketing strategy to do exactly what EA is doing. Cheaper next gen console ($279) would mean more consumers purchasing it, which would boost sales of their game which clearly runs better on the 360 (360 has better video hardware anyways its documented on Anandtech), has a much larger installed base (11 million, not to mention online capabilities and money from XBL marketplace) and even if their was kickbacks for EA, it is well documented that Sony has paid off game developers for years. The fact of the matter is that you are most likely a disgruntled Sony fanboy who spent a large sum of money on a console that will be obsolete because game devs like making money, and the PS3 is a failure. Have a nice night on you’re crappy blog site :)

  32. Drunk Gay Panda

    drunk pandas ur a fucking retard go jump off a bridge, and get a lady friend or something or an escort service for yourself, you have too much time on your hand, i highly doubt that its some huge behind the scenes conspiracy!

  33. take it or back off !!

    Sony fanboy can’t control themselves!! WTF !!
    I am a gamer and want the best platform to get all the best games.
    thats why, i was a Xbox fanboy but turned into PS2 fanboy last generation war.
    Why?
    only because games that comes to PS2 platform and Xbox got nothing and late games and something no games !!
    Same things are going with X360 and PS3.
    Money power!! hah ! Sony invest on Cell processor and MS invest on Game Developers adn Publishers! So, now, cell is powerful(yet i haven’t seen anything special) and game publisher on MS side. Simple math calculation. Don’t need to find some fishy things from Commercial you ??? head!!

    I want to say a funny story:
    when Bioshock getting 9.6 or above rating from every review, Sony fanboys says we don’t need it, it not that good or something like that! but today i heard that the games config.ini file got a information may point that its comimg to PS3 (may be next summer’08). Now they just shouting and bullshit talk to Xbox that how they got that game ! ha ha ! babies !!!

    Warhawk and Lair gets bad review and fanboys telling that the editor was Xbox magazine! then why they appoint him !!?? How many excuse u got people??

    Final thought: PS3 will get treatment what original XBOX got last generation. BELIEVE IT OR NOT !

  34. oldest gamer

    EA, curse you. You have forgotten your PlayStation fathers. Cozy up with Microsoft, go ahead. Only 4 years ago you wouldn’t even develop a Live game on the crap box but now you only put the effort into the crap box versions. Microsoft sickens many people simply because of their arrogance and shrewd business tactics. My God they have held up the computing industry for about a decade. Now they creating greedy partners in crime in the game industry. A sad time for all gamers.

  35. Readmore

    Um I do believe these are MICROSOFT commercials.. not EA

    Get it people? No one paid off anyone in any wacky conspiracies. This is a Microsoft Ad for the Microsoft Xbox 360. It just so happens to have Madden in it which Microsoft believes is a huge holiday seller.

    This whole article is teh worthless

  36. Ok guys your comments and thoughts are appreciated and read but attacking an editor and resorting to what are 5th grade tactics of name calling are just un-called for. Dont be surprised to see a few of these comments disapear as we wont condone this kind of behavior. We do not like censoring anyone here but we draw certian lines where racism or just plain out threats wont fly.

  37. CJ

    Ok, well… Alot of you guys are supporting Microsoft and saying that they did not give EA money. So my question is… are you ignorant fanboys? I mean come on, look at Microsoft, they always throw money at every problem. They have crappy Operating systems, buggy software, and faulty hardware. They only reason why I even have Windows is because thats the only OS PC games work on. If they worked for something else I would be using Linux. Microsoft is just like EA and Ubisoft. None of them make quality products and they are overpriced. I mean look at Battlefield 2, it wouldn’t work on half of the computers until v1.2! TWO patches later. And no I am not a WoW addict, but look at Blizzard. Atleast they support thier products, they don’t release the product untill it’s how they want it to be. Even then they still upgrade it, StarCraft has been out for 10 years and they are still making patches for it and running B.Net. We need more companys like Blizzard and less like M$ and EA. The only reason why I buy Madden is becuase I LOVE football. But it could be so much better. I just hope someday more people realise the truth and do something about it.

  38. Serious

    @ CJ – PC games aren’t supported on any other operating system. Last I checked you could play your WOW on Mac and many other games… Not to mention the fact that these commercials are infact paid for by Microsoft and no EA after further research. But I salute you sir, keep living in your dreamworld!

  39. Like taz said, no need to get into threats. I’m leaving that one just because it gives me something to laugh at. The comment with the racist remark has been deleted. Congrats on being the first comment we’ve ever manually deleted.

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