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Commentary > Game Over
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Are you ready for some football?
Sega and Electronic Arts go head to head on the virtual gridiron.
July 23, 2004: 10:33 AM EDT

NEW YORK (CNN/Money) – The players are lining up on this year's virtual gridiron, but there are a lot fewer teams this time around. Last year, five video game publishers had football games. The 2004 season will only host two: Sega and Electronic Arts. But the battle could be the fiercest we've ever seen.

Kickoff was last week, with the release of "NCAA Football 2005". And if early sales are any indication, it's going to be a record-breaking year for EA. In its first week, the game saw a more than 50 percent increase in sales compared to last year's game, putting the number over 600,000 copies. Reuters reports sales on the Xbox have doubled.

And looming in the shadows is the 500 lb. gorilla: EA's (ERTS: Research, Estimates) Madden franchise, due Aug. 12. Last year's version sold over 5 million copies and was the best selling console game of 2004. This year, the game will likely top these numbers, with the addition of online play for the Xbox likely to bring in a new segment of the audience. EA said pre-orders for the game are double what they were at this time a year ago.

Sega's not rolling over, however. The company has teamed with Take Two Interactive Software (TTWO: Research, Estimates) to co-publish Sega's critically acclaimed line of ESPN sports games. "ESPN NFL 2K5," the first product of that partnership, hit stores Tuesday – a month earlier than the previous installment. And in an effort to turn around anemic sales, Sega and Take Two have slashed the game's price from $50 to $20.

It's a bold plan, but it could pay off.

"It's a brilliant move," said P.J. McNealy, an analyst with American Technology Research. "At this point in the cycle, the graphics and realism of the [Madden and ESPN] games are going to be pretty close, because developers have gotten much more savvy at this point in the cycle. If you have price-sensitive consumers coming in the market and the choice is between $50 and $20, EA will lose some market share at the low-end."

The graphical differences between ESPN NFL 2K5...  
The graphical differences between ESPN NFL 2K5...

Saleswise, the game has nowhere to go but up. "ESPN NFL 2K4" only sold 360,000 copies. Reviews have been glowing for this year's game so far. Gamespot.com, for example, called it "a game you simply can't afford to pass up."

But some feel that by dropping the price so low, Sega sends the wrong message about the game. Let's face it: a typical $20 game is usually either fairly old or 'shovelware' (low-quality, low-budget games thrown on shelves in hopes of making a quick profit).

...and Madden 2005 aren't significant.  
...and Madden 2005 aren't significant.

"I think going down to $20 dilutes the brand and makes it seem like a budget title," said Mike Wallace of UBS Securities. "The message it sends is ESPN is a budget brand and it's not worth as much as Madden."

Sega and ESPN, naturally, disagree.

"This is a long term strategy," said Matt Attwood, spokesperson for ESPN Videogames. "The reason we're doing this is because we have such a great game. If we weren't getting great reviews, it wouldn't make sense to do this."

Electronic Arts CEO Larry Probst, while not commenting directly on Sega's pricing move, did note in a company conference call Thursday: "We think that more people will buy two football games than they did last year."

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Wallace isn't as optimistic. He predicted Sega and Take Two will only sell an extra 100,000 copies of the game.

"Football isn't something that's won on price," he said.

Football games are the great equalizers in the video game world. No other type of game provides a common language for the hard core and the casual gamer, which explains the games' appeal to publishers. This year, though, Midway, Sony and Microsoft all opted to spend the season on the bench.

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Part of that is undoubtedly due to the strength of Madden, which plows through the competition like Bruce Smith would through a junior varsity offensive line. But other factors also come into play.

Midway's (MWY: Research, Estimates) "NFL Blitz" is an arcade take on the game, with realism tossed out the window. The company said it plans to only offer new installments every few years at this point, since gameplay changes so minimally year to year. Sony's (SNE: Research, Estimates) "989 Sports" line has taken a critical drubbing for years – and the company said in May it planned to take the season off to improve the series. Microsoft's (MSFT: Research, Estimates) "NFL Fever" is getting geared up for Microsoft's new console, which will likely be released next year.

A lingering question is whether ESPN's price drop to $20 is going to be a recurring act or a one-time only affair. Sega said no decisions have been made, but Wall Street believes the price will go up again next year. If so, you have to wonder: How much brand loyalty Sega can build in one year – no matter how good this year's version is.  Top of page


Morris, an admitted Falcons and Bills fan (whimper), is Director of Content Development for CNN/Money. Click here to send him an e-mail.




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