EA Sports' Madden franchise is the only NFL football game in town, and it might quite literally be the only football game around if the NFL lockout isn't lifted. Every year, gamers flock to the latest Madden game in ritual fashion - including some fans who only buy just a handful of video games per year but always reserve a spot for Madden. The franchise sells in the millions all the time, providing a big revenue boost for EA, but what impact will the ongoing lockout have?
Wedbush Securities analyst Michael Pachter told us, "Sales would be down 40%. I don't think there will be a lockout." Thankfully for NFL fans, it looks like Pachter may be right. It would appear that the sides are close to an agreement and today the NFL Players Association representatives have gathered in Washington, DC, to vote on whether to accept the new collective-bargaining agreement.
That said, there's no guarantee that a deal gets done immediately. “We’re not tied to a timeline of July 21,” NFLPA president Kevin Mawae said Wednesday morning. “Our timeline is to get the best deal for our players. We’re not going to agree to any deal unless it's the right deal for all the players.”
Ironically, a slightly drawn out negotiation that ultimately doesn't derail any part of the season could actually benefit EA's Madden performance, noted M2 Research analyst Billy Pidgeon.
"The crucial factor is whether or not fans are alienated in the struggle between the players and team owners. If the NFL lockout were to prevent the season, there could be a negative effect on Madden sales. On the other hand, prolonged negotiations between the players and owners that appear to be leading toward a settlement would enhance sales by increasing awareness and positively engaging fans in the season's return," he told IndustryGamers.
Of course, Madden is just one small part of a vast NFL economy, and the timing of the season is something that businesses need to prepare for, advised EEDAR's Jesse Divnich.
"An NFL lockout would impact the entire football economy, which includes everything from memorabilia to video games. I am even sure pizzeria's would see a decrease in Sunday revenues," he remarked to us. "Fortunately, as with previous professional sport lock outs (e.g. NHL in 2005), sales do eventually bounce back. Even if a lock out occurs, whether brief or for the entire season, we see no potential long-term impact to the health of any NFL licensed video game."
"The real [problem] isn't 'if' there is a season, but rather when? Companies holding NFL licenses have critical decisions that are often made months in advance of a release, such as demand planning, retail coordination, and marketing strategies. The fact that we don't know now, in July, on whether we will see a season in September is a significant problem."
EA Sports boss Peter Moore has previously acknowledged that a cancelled NFL season would be disastrous for Madden, leading potentially to lost revenues of $80 million. He said EA's working with the NFL as well as the NFL Players Association to “minimize the potential impact of a lockout-shortened season.” Moore added, "You do get concerned that the attention of sports fans goes elsewhere. People not only get disenchanted, they get angry.”
Madden NFL 12 ships on August 30 this year.
