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Electronic Arts vs. Microsoft

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From gamesarefun.com:

"It really comes down to a difference in philosophy about the business model," Probst said. "They're creating a new revenue and profit stream. They want to use our intellectual property. They don't want to compensate us for the use of our intellectual property. We think that's a little unrealistic."

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Just a question, since I don't own a PS2, does EA charge to play their sports titles online? If not, especially after reading that article, it would seem that Sony's giving them a slice of the pie. I think it's entirely fair that they wanna be paid for their "intellectual property." But...

From MS' point of view, apparently they've never given any 3rd party devs any revenue from Xbox LIve. That's the status quo, why change it for EA? MS is probably telling them that if they want to make money off of XBL, they should charge a monthly fee, 'cause there's NO WAY we're giving you money. But...

EA probably doesn't wanna charge monthly fees 'cause they're worried not too many people will pay them (I know I, sure as hell, wouldn't). Maybe they're worried about charging people, on top of the $50-70 a year or $6 a month for XBL, and looking like a BIG, BAD CORPORATE GREED MACHINE.

Personally, I don't give a damn if EA goes Live or not. They've got NOTHING I wanna play online (I hate sports...except for Links ;)) But, hopefully this can be resolved so that those who do want EA online can play without paying extra fees. But, IMHO, I don't see how. :?

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Right now EA doesn't charge any fees to play PS2 games online. Their online setup is actually quite nice and similar to that of XBOX Live, except it only works with EA games. Still, EA may eventually wanna charge for their service in the future. They still haven't made it clear what their overall goal is, but it sure as hell aint about providing free service.

 

Both parties make some good points in this big debate. EA owns TONS of intellectual property that if XBOX could get Live enabled would not only help out Microsoft in terms of console sales, but would probably get Live subscriptions way up. EA knows this which is why they feel they should be compensated. On the other hand, Microsoft has invested a lot of money into building up this infrastructure and since it's basically due to all their efforts that a game plays well on Live, they feel they should reap all the benefits. It's really a tough call right now as both having convincing arguments.

 

XBOX Live is great for the smaller developers cause they can add some neat online features to their games to help make them sell better and they don't have to do tons of work in terms of providing all the online services. Small developers certainly wouldn't expect to get compensated anymore since they're already getting compensated by seeing their game sales increase due to having online capabilities. However, EA makes TONS of games. Their games already sell tons and while having XBOX Live service certainly might increase sales, it wouldn't be all that dramatic since many of their current franchises already sell several million copies.

 

I'm not sure how they'll ever resolve this. It seems like EA's online service for the PS2 is going really strong for them, so right now they don't feel all that compelled to use XBOX Live. Now, if the day comes that EA starts charging PS2 users and they discover that many gamers won't pay, then they may change their tune about it. For now though, I don't see any resolution in sight.

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It's been widely rumored that Microsoft & EA have resolved the Live issue and that the next versions of their sports games will be Live enabled. Still, it's only rumor at this point.

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Right now EA doesn't charge any fees to play PS2 games online. Their online setup is actually quite nice and similar to that of XBOX Live
Then Sony has GOT to be hiting them off with money or something. I can't believe that EA would want MS to pay, while Sony gets a free ride. Plus, MS has an existing online service, meaning devs just have to write the code to take advantage (right?), while EA had to CREATE an online service for the PS2 and then not charge a fee, in effect losing money. Weird.

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Well, the thing is that EA already invested TONS of money into creating an online service probably before Microsoft came out with Live. Part of the reason they don't like Live is because they can't use all the equipment and stuff that they invested in. They spent a lot of time and money developing an online service, so they want to stand by their investment.

 

Sony might have given EA some more money, but not a lot. EA is basically in control of the online service it provides. Sony does nothing but give PS2 owners the means to connect to it. EA likes having total control.

 

However, if EA was on Live, MS would have total control. EA doesn't like this. EA may use the online service as another revenue stream, so they like being in control of their service. With PS2 it works out great for them, but not as much with Live since MS controls it. Hence, the demand for extra compensation from MS.

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just an abbreviation that most seem to know.

 

Every single one of the current next generation console manufacturers are here to make money. EA in particular has been the the shining example of how to manage thier intellectual properties and keep themselves at the top of the third party food chain by any means necessary (including the non-support of Live whether you agree with it or not).

 

Believe me that no offense is meant here danger as you make some great points in your post however this is a bit of a concern to me. Put in the most direct possible way, the use of the "$" as an abbreviation in ANY companies name needs to go (and that goes out as a very generalized statement). It really doesn't help to prove any point and in actuality makes it very difficult to take any side of an argument presented in such a manner seriously. We always strive to keep any conversation here as level headed as possible and for the most part this is my attempt in keeping with that edict. ;)

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Fair enough....I'll refrain from doing it anymore. I went in and adjusted my post to reflect this. Sorry.

 

Its all good danger and thank you for making the change. That was very big of you.

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I simply do not think that EA should be treated differently than other developers simply because they have and are willing to wield their power. EA wants to have a unified online model across platforms and want to impose it on Sony, Nintendo, and Microsoft. Fortunately for them, they have the power to play that game. I simply do not think that they are in the right.

 

Like previously said, EA absorbs the costs in running EAonline, and should therefore control the revenue streams. Microsoft absorbs the costs of XBlive and they should control the revenue streams. This is appropriate.

 

EAs problem isn't that Microsoft controls the revenue streams with XBlive. It is that XBlive exists at all. They like Sony's model better where it is a completely open system. But its not. And they better get over it. Because what happens when Sony actually creates an online system for the PS3? They'll run into the same problem. I don't think Sony will want to construct their system simply to accommodate one publisher, even if it is EA.

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Originally posted by danger9777@Jan 6 2004, 05:27 PM

Well, the thing is that EA already invested TONS of money into creating an online service probably before Microsoft came out with Live. Part of the reason they don't like Live is because they can't use all the equipment and stuff that they invested in.

Is there any evidence of this? How much money was invested? Was all of that money EA's?

 

-j

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I've got two questions about this (because, in short, I really don't know the answers to them).

 

1) Right now, one of the biggest things EA's online strategy has going for it is that PS2 and PC owners of NFS: Underground can race against each other on the same server, because EA controls the backend for both. Is there any likelihood that MS would allow Live users from other systems onto the servers?

 

2) Also, things like XBTunnel allow people to play XBox games online outside of the Live environment, by tunnelling System Connect games. Is there any chance that EA could design an online game for XBox (and other consoles) that just ignores Live completely?

 

While on the face of it this spat seems to be about EA control, I can certainly see that lock-in to any online gaming being XBox only being a problem for them.

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Originally posted by Robot Monkey@Jan 7 2004, 09:21 AM

[is there any evidence of this? How much money was invested? Was all of that money EA's?

 

Well, I remember reading an artcile about how EA invested tons of money in bringing the Sims online and it wasn't near the success they hoped it to be. Also, when EA first announced they weren't coming out on XBOX Live, I remember an article with one of the head guys in the XBOX division talking about how EA made a big investment in online services and that they want to stick by their investment. Unfortunately I don't have links to the sources, so take it for what it's worth.

 

I think the main issue is that EA likes having control and doesn't want to relinquish control to MS.

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Originally posted by danger9777@Jan 7 2004, 09:08 AM

I think the main issue is that EA likes having control and doesn't want to relinquish control to MS.

...uh, and vice-versa, if not moreso.

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Is there any chance that EA could design an online game for XBox (and other consoles) that just ignores Live completely?

 

That's a really good question. I just wonder if developers are contractually obligated to use the Live service if they are developing an online game for the Xbox. I would think that is the way that it is.

 

Glen

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Originally posted by gwhinwi@Jan 7 2004, 01:02 PM

Is there any chance that EA could design an online game for XBox (and other consoles) that just ignores Live completely?

 

That's a really good question. I just wonder if developers are contractually obligated to use the Live service if they are developing an online game for the Xbox. I would think that is the way that it is.

 

Glen

Microsoft wouldn't ever consider approving a game that was online and didn't use live.

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I think the main issue is that EA likes having control and doesn't want to relinquish control to MS.
This isn't "The Matrix", folks. This whole thing is NOT about control...it's about MONEY. Unless you mean control of revenue.

Why would EA spend (lose) money on an online service unless Sony's giving them some $$$. They spend money on a service then provide it for FREE. Something doesn't add up (pun intended).

If EA NEVER went online, they'd still be in good shape (kinda like Nintendo). Their titles sell ridiculously well and let's face it, online console gamers (PS2 & XBL) are only a fraction of their customers. So why do it at all? To get into the online thing? Then why not give XBL a shot, if they're so interested in online gaming? Hell, if they made Madden football XBL-compatible tomorrow, they'd sell 100,000 copies in a flash. EA knows it. But they're not doing it because of "control" issues. :roll: I don't think so.

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But they're not doing it because of "control" issues.

 

Damn right. You said it yourself:

 

Unless you mean control of revenue.

 

Thats exactly what everyone means. Its about who controls the stream of money coming in. Sure EA could charge on XBL but its been mentioned that they also want the ability to shut off service for Madden 2004 as soon as Madden 2005 comes out. Same goes for the myriad of other sports titles they have. Control of revenue is exactly what everyone here is talking about and that goes beyond simply charging for thier games online.

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Unless you mean control of revenue.

 

That's exactly what I mean.

 

Why would EA spend (lose) money on an online service unless Sony's giving them some $$$. They spend money on a service then provide it for FREE. Something doesn't add up (pun intended).

 

EA knows online gaming will be big. Hence them investing a lot of money into it. I'm more than certain EA will eventually start charing people to use their services, but they'd be foolish to at this point because there just aren't enough people on it to make it worthwhile and you would burn many people by doing so. Right now EA is trying to make a name for themselves with online gaming. Once they get enough people hooked on the service, then they'll eventually switch to charging people for it.

 

You're right...... it's all about the money and EA wants some of it. MS is the same way. They started up Live cause they knew online gaming would be big and eventually it will become a big source of MS' revenue. Both companies want the same things, so they're not too happy with the other and are trying to meet somewhere in the middle.

 

in online gaming? Hell, if they made Madden football XBL-compatible tomorrow, they'd sell 100,000 copies in a flash. EA

 

I don't know about that. Chances are most XBOX owners also own a PS2 and if they wanted to play Madden online they already would've bought it. This may not hold true for many here, but PS2's are in enough homes in the world that there's a good probability that homes that have an XBOX also have a PS2.

 

What actually baffles me is why didn't EA make their games online for GC. Isn't the GC strategy similar to that of PS2 by leaving it to the developers? So why aren't any developers making their games online for GC?

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So why aren't any developers making their games online for GC?

 

I'd wager it has something to do with the PS2 having sold many times the number of Cubes, giving it the far greater installed userbase.

 

Now, we also can likely presume that only a small portion of gamers are, at this time, taking their consoles online.

 

So, do you want a small portion of the Cube's userbase online or a small portion of the PS2's userbase online? PS2, hands down. I'd be shocked if the online base for the Cube would even be enough to turn a profit from hosting servers, but that just might be my cynicism.

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