Pachter calls out economics professor who says EA overcharged Madden buyers by up to US$ 926 million |
A University of Michigan economics professor was recently brought in as an expert witness in a class-action lawsuit filed by a pair of gamers that accuses Electronic Arts of using its exclusive licensing deal with the NFL to muscle Madden NFL competitor NFL 2K out of the picture.
As part of his expert witness testimony, Dr. Jeffrey MacKie-Mason alleged that EA overcharged those who bought Madden games between US$ 701 million and US$ 926 million from 2006 through 2009. Big numbers there, but Wedbush Morgan analyst Michael Pachter thinks it's nothing more than horse manure.
In an email exchange with GamePolitics, Pachter didn't mince words in criticizing the professor's monopoly theory:
What kind of fool is this U of Michigan economics professor? ...Madden (according to NPD) sold 23 million units in 2006 - 2009, not the 30 million that Dr. MacKie-Mason claims... The total retail sales were US$ 1.034 billion, meaning that EA's cut was around US$ 800 million (retail margin is 20%). How in the world does [MacKie-Mason] conclude that EA overcharged by more than they generated?
For the four year period, EA's average retail price was US$ 44. For the period 1995 - 2005 (when either Sega or Take-Two provided [NFL 2K series] competition), EA generated US$ 1.548 billion of sales on 36 million units, for an average price of US$ 43. In other words, WITH competition, the price was US$ 43, and WITHOUT competition, the price was US$ 44.18...
I rarely read anything that gets me so incensed... They may have some odd estimates I'm not aware of, but based on what you printed, they should be embarrassed. You can quote me.
An increase of a little more than a buck? Gotcha, Mr. Pachter. You've been quoted.
Dr. MacKie-Mason does acknowledge, however, that his analysis is based on incomplete data. EA attorney, meanwhile, have agreed to furnish documents dating back to 2001.
More Madden lawsuits:
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Comments [refresh]
i hate this
fair competition crap, it does the economy good but i still dislike it
It does the economy good but you dislike it. Make sense as much sense as the average person anyway, which doesn't mean much.
As to the article here on QJ there something that doesn't make sense.
Alleged between US$ 701 million and US$ 926 million from 2006 through 2009, Patcher says they did 800 million.
So there's a WHOLE lot missing from both this article and Patcher's assumption. I believe they are saying that since EA has taken the entire license this amount is how much they would have to repay everyone who ever bought a Madden game.
So I don't know there's a lot of if's but's and maybe's in this whole thing.
its more of a paradox
i hate the fact that fair competition must come into it, inorder to do the economy good, its a sad truth
that business cant get to much ahead of its competition
actually crippling one company to give another a chance isn't all that fair. that's kind of a misnomer actually... fair competition.
the free market is like communism... great in theory, but people will ruin it. so it's got to be kept in check.
...and both suck; because they're self-destructive of their own ends. Free market is something different entirely and something America hasn't really experienced in a long LONG while. Capitalism allows for corporatism and unfair advantages of 'the biggest fish' (see: WalMart, Microsoft, EA, etc.). The government empowers these entities with tax breaks, laws, etc. based upon their size and impact to the economy (hence, the 'unfair advantage'). In a free market economy, the laws truly apply equally to all, and no advantages are given just because a company has 'x' number of employees or operates in 'x' number of States, etc. Communism is similar, in that power is centralized even further, and a select few individuals have effect over that. Also, 'redistribution of wealth' is a key facet, although implemented directly (whereas capitalism implements essentially the same thing, but indirectly: evidence Goldman Sachs, AIG, etc.) The only thing capitalism and free market share is that there is the ability (to varying extents) to 'choose'.
Dude, you got it all figured out! You should totally run for president!
Even distribution is worthless because it won't happen; someone will get a bigger cut for themselves and take advantage of having more resources.
EA hasn't released anything interesting in a decade, they just pump out the same sports game with graphical updates and stat updates for the players. Even if they lose the suit, I'm sure they'll find a way to pay less.