NHL Exclusivity Check

NHL checks EA exclusivity offer on GameSpot has more on EA's maneuverings to possible secure an exclusive NHL license, apparently shedding a little light on abortive indications that such a deal had been struck (story). Word is:
Electronic Arts recently signed a six-year, $44.2 million exclusivity agreement with the NHLPA, but nobody told the NHL itself, according to an article in the Sports Business Journal (subscription required). The deal reportedly only covered third-party games, so Sony could continue its licensing of the Gretzky NHL series.

Upset by the notion that the players would try to go behind its back and essentially impose exclusivity on the deal, the league refused to extend its own licensing agreement with EA unless all parties returned to the negotiating table and found a way to cut Take-Two Interactive in on the deal. Take-Two publishes the NHL 2K series of games through its 2K Sports label, while Electronic Arts has published NHL games dating back to NHL Hockey on the Sega Genesis in 1991. In that stretch of time, the company only once made a game with the Player's Association license but not the league license, NHLPA '93.
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Re: No subject
Dec 22, 2005, 18:46
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Re: No subject Dec 22, 2005, 18:46
Dec 22, 2005, 18:46
 
I sure do. You might want to take a look

And of those three definitions EA only fits into the third, which also happens to be the most broadly defined and does not fit the economic definition of a monopoly. Try again.

There are four criteria that a firm needs to meet if it's going to be a monopoly (this is taken from my old microeconomics textbook by the way):

1. Single Seller- The industry in question must have only a single firm producing the good or service. EA, while having the largest market share, competes with several other publishers in the game industry.

2. No Close Substitutes- The good or service has to be unique beyond being a different brand and there can't be any substitutes for that good. In the case of sports video games, other companies can make non-NFL or NHLPA sports titles which would be adequate substitutes for an EA title.

3. Barriers to entry- Their must be barriers preventing others from entering the industry. EA can certainly try to purchase a game company but they cannot prevent a game company from entering the market.

4. Price Setter- A monopoly has total control over the supply of a product and can therefore adjust total supply to affect the good or services price. If EA tried to raise the price of sports games they'd never be able to sell them, their are too many substitute goods.

EA is not a monopoly. They don't even have a monopoly on sports games. What they have is the largest market share but that alone is not enough to make a firm monopolistic.

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