A district judge has cleared a class action lawsuit against Electronic Arts this week, which means it should eventually become a jury trial.
The class action suit claims EA illegally increased the price of the Madden NFL series after it won exclusive rights to the NFL license, in 2005.
Any purchaser of a Madden game from 2005 until now is eligible to register as a plaintiff in the wide-ranging suit.
In 2004, Take-Two released NFL2K5 for just $19.95, taking on the behemoth Madden, which was forced to drop its prices to $29.95, down from the standard $49.99.
EA won the exclusive NFL license the next season and returned Madden prices to $50, and eventually $60 when the Xbox 360 and PS3 were launched.
Says plaintiff lawyer Steve Berman (via GI):
“Consumers now have a legal standing to demand that EA refund consumers millions of dollars it made from Madden NFL and other sports titles through what we contend was an illegal price-gouging scheme.
“We believe EA forced consumers to pay an artificial premium on Madden NFL videogames. We intend to prove that EA could inflate prices on their sports titles because these exclusive licenses restrained trade and competition for interactive sports software.”
Result for: electronic art
Zynga, the social gaming giant behind “FarmVille,” has just been valued at $5.5 billion by SharePost, the service which exchanges shares of privately held companies such as Facebook, Twitter and Zynga.
With a market cap that large, Zynga is now considered the second largest gaming publisher in the world, surpassing Electronic Arts (EA) which has a current market cap of $5.15 billion.
Nintendo remains the top publisher.
Zynga was launched four years ago and mainly uses Facebook to distribute games. With a built-in audience of 500 million, the company has ascended very quickly thanks to FarmVille, FrontierVille and others. The company makes money off virtual goods, like weapons and upgrades that advance in-game play.
The company has about 210 million monthly active users.
Result for: electronic art
Electronic Arts will purchase Chillingo, the publisher behind the blockbuster game “Angry Birds” in an effort to boost their mobile gaming catalog.
The software company will pay around $19 million for Chillingo.
EA has confirmed, however, that they will not get the intellectual property rights to “Angry Birds,” which was developed by the Finnish company Rovio Mobile.
One analyst was surprised by the purchase because it lacked the IP for Angry Birds: “I’m kind of wondering what they bought,” says Todd Mitchell, a Kaufman Bros analyst, via Reuters. “But in light of EA not getting the IP, they’re buying the development platform to put their own IP on it in hopes of driving social networking and customers back to their own properties.”
Chillingo’s other popular game is “iDracula,” a shooter available for iOS devices.
Concludes EA: “By acquiring Chillingo, EA Mobile is increasing its market leadership on the Apple platform as well as reaffirming its position as the world’s leading wireless entertainment publisher.”
