ESPN and Electronic Arts announced a 15-year integrated marketing agreement on Monday that will allow for all of EA's sports franchises to have access to the network's programming and personalities.
The deal will help alleviate the slight awkwardness in the relationship between ESPN/ABC and EA. Despite the fact that ESPN had its own branded football game, John Madden and Al Michaels, who are under contract to broadcast ABC's Monday Night Football, are the voices of EA's Madden game.
Faced with tough competition from the ESPN-branded NFL 2K5, Electronic Arts secured exclusive video game rights for its Madden franchise last month that prevented other gaming companies from using NFL marks and players' names for the next five years.
"Our mission is to be in a place that is central to our fans, wherever they are watching, reading or logging on," said John Skipper, ESPN's executive vice president of advertising sales, new media and consumer products. "Video games has become the new medium and we felt that it was crucial for us to be there in the biggest way possible."
The alliance pairs one of the most powerful names in sports with the leading sports video game maker.
"There is no better innovative partner than ESPN," said Frank Gibeau, EA's senior vice president of marketing. "We want to grow the sports category aggressively and nobody matches the capability, brand power and creative thinking in the news information and entertainment world."
The deal will commence in 2006, as ESPN still has one year left in its partnership with Sega.
Many in the video game industry have speculated that EA's buying out of the NFL rights could lead to ridding the sports video game landscape of any meaningful competition. NFL-branded games are typically the money generators in the sports video game business. More games with the NFL license are sold than NBA and Major League Baseball games combined, according to the NPD Group, a market tracking firm.
Midway has announced plans to make a non-licensed NFL game called "Playmakers," loosely based on the ESPN drama. But other players -- including Sony's 989 Sports and Microsoft, which sat out last year -- have not talked of entering the football gaming business without the license.
Sega formally took on ESPN names in the fall of 2003 and the loss of the network's branding could take a toll on its other licensed products, which include NBA, Major League Baseball and men's college basketball games. Skipper said that the immediate plans call for the unveiling of a branded baseball game with Sega in March. Calls placed to Visual Concepts, Sega's sports studio, were not returned.
Take-Two Interactive markets and distributes the Sega games.
"The ESPN license was principally a branding tool and as such does not have a meaningful impact on game play," said Take-Two spokesman Ed Nebb. "The key to the video game business, especially sports, is to develop the best game possible and the games produced by Visual Concepts are among the highest-rated and best-reviewed sports games available."
Before this year, EA's Madden franchise, which debuted in 1989, dominated the football game marketplace. But the Madden 2005 game was seriously challenged by ESPN's NFL 2K5, thanks to good reviews and a pricing war. NFL 2K5 was available in stores in July for $19.95. The Madden game was priced at $49.95 for three months until the company finally relented and lowered it by $20.
Sports video games accounted for more than 20 percent ($1.2 billion) of the $5.8 billion video game market last year, according to the NPD Group. Gibeau said that the alliance could help EA compete against other non-sports titles like Rockstar's Grand Theft Auto franchise and Microsoft's Halo.
Since the deal with the NFL, EA's stock price (NASDAQ: ERTS) has risen 10.4 percent to $59.84 a share, just $3.87 off its 52-week high.
Darren Rovell, who covers sports business for ESPN.com, can be reached at Darren.firstname.lastname@example.org.