EA could pay out $27 million to 'Madden' and 'NCAA' gamers in class-action lawsuit

Electronic Arts has reached preliminary settlement with the consumer protection law firm Hagens Berman, who filed suit against the company for violating antitrust and consumer protection laws in making its popular football video games.

The settlement has not been approved by U.S District Court, but if it is confirmed as it stands, a $27 million fund would be set up to pay out purchasers of EA's football games since 2005.

According to

by Hagens Berman, the suit was originally filed in 2008. Under the terms of the settlement, players who bought an EA football title on the previous console generation could be eligible to receive $6.79 per purchase, while those who bought a current-gen game could get up to $1.95 per title.

An important factor in the settlement is not necessarily the monetary punishment, which is not much more than a drop in the bucket for the publisher, but the stipulations about future license agreements.

Since 2005, EA has held the exclusive rights to make NFL games on the major consoles, and since 2008 has had a similar deal with the NCAA. EA also had a similar deal with the Arena Football League, which only resulted in one game, 2006's "Arena Football."

In the terms of the class-action settlement, EA must give up its exclusive rights to NCAA football at the end of its current agreement in 2014, and cannot re-sign such a deal for another five years after that. EA also cannot negotiate an exclusive deal with the Arena Football League for five years.

The biggest blow to those hoping for a competitor to EA's sports flagship, "Madden NFL Football," is that nothing in the settlement restricts EA's exclusive deal with the NFL. Many gamers have complained not only about the price, but the quality of "Madden" games since EA's exclusive deal with the NFL put an end to 2K Sports' competing product in 2005.

EA's football games generally retail for $59.99 at launch, which is on par with other "AAA" or premium games. In 2005, the last year "Madden" had a competitor, 2K's "NFL 2k5" was shipped at a retail price of $19.99 compared to "Madden NFL 2005" at $49.99. 2k's game was thought by many not only as the better buy, but a superior gaming experience.

If the settlement is confirmed, it is possible that football gamers could see a challenger to EA's popular "NCAA Football" series in 2014, though 2K Sports has not produced a college football game since 2002 and there is no other immediate challenger.

The cost of acquiring a license from the NCAA to compete with EA might make it prohibitive for another company that is not an industry titan to make a game, much less undercut EA in price as 2K once did.