EA Sports vs. Take-Two

Troy Wolverton of TheStreet.com has written an article describing the uphill battle faced by companies like Take-Two when trying to gain ground in the EA-dominated sports market. Sports comprise more than 19% of video game sales, and EA sports titles make up 62% of that. When Take-Two and Sega teamed up to put out the ESPN 2K line, they forced EA to cut prices, and succeeded in taking momentum away from the larger company's sports domination. However, EA simply followed up by securing exclusivity with the NFL, the NCAA, the AFL, and even ESPN. Take-Two has managed to secure the exclusive rights to make third-party Major League Baseball games, but analyst Michael Goodman believes that baseball games do not sell well enough to build a brand like football can.

"I don't believe baseball, hockey or basketball are popular enough to build a brand around," says Goodman. "They have a fan base, but I don't believe they're big enough to build an entire corporate identity." The loss of the ESPN brand represents a further challenge for Take-Two, forcing the company to essentially begin brand-building from scratch. That's in contrast to EA, which just put out the 16th version of its Madden. ...Take-Two also faces a well-financed competitor. EA is rumored to have spent hundreds of millions of dollars to get the exclusive on the NFL game. And if the company feels under threat in the other sports areas, it may well decide to throw money at them as well.
Everyone knows that EA is the world's biggest video game publisher and that their sports label is a key brand, but it is nonetheless unnerving to see a publisher able to effectively negate its competition simply by virtue of having enough money to ensure its competition can't even make a certain category of games.