Digital Sportspage Blog

As reported on Kotaku and Gamespot, it currently looks like College Hoops 2K9 has been cancelled. In the original Kotaku article, they reported that “Electronic Arts may be in the process of trying to secure another exclusive sports franchise by landing the same sort of licensing deal that managed to grab with the NFL.” Take-Two wouldn’t discuss the role of Electronic Arts, but they released the following comment:

2K Sports has decided not to continue negotiations with the CLC for the license for its top-rated College Hoops franchise, which would have been released next in November 2008. We are committed to providing fans with high-quality, critically-acclaimed sports games, but given our disciplined approach to the business, we do not believe the current discussions would result in an acceptable outcome.

One possibility is that the cost of the license has remained the same, but that 2K Sports simply can’t afford the license anymore. However, this doesn’t make sense. First, the College Hoops series has been selling relatively well. In the first week of sales, College Hoops 2K8 for the 360 outsold 2K7 by 30% (26,280 to 20,234). To compare, sales of March Madness 08 actually decreased 32% compared to last year’s version. If sales of College Hoops were stagnant or decreasing, then this could be a reason to dump the series. But with increasing sales, the ability to pay for the license should not be a problem.

A second possibility is that, since 2K Sports spent so much on the exclusive MLB license and for player licensing in All-Pro Football, they simply couldn’t afford to keep the College Hoops series running. This would be possible IF the College Hoops series has been unprofitable over the last six years, essentially subsidized by other games in the 2K Sports stable. But does it seem at all likely that 2K Sports would subsidize an unprofitable series for six years? And if the College Hoops series was profitable, why get rid of a moneymaker?

This leaves the most likely option. The Collegiate Licensing Company increased the price of the NCAA basketball license to something that 2K Sports will not or can not pay. Assuming that EA and 2K Sports previously paid the same for the license, my guess is that the new license fee is substantially more than double the old license fee (since the CLC won’t want to take a loss if they lose money from 2K Sports). Furthermore, the CLC would have likely known that whatever number they set is a number that they knew EA would pay.

It will be interesting to see what announcement EA and the CLC make in the upcoming weeks. Remember that EA already holds a six-year exclusive contract for NCAA football rights, expiring after NCAA Football 2011. EA could be attempting to add an exclusive license for college basketball as well.

However, if 2K Sports is priced out of the market, EA will have a de facto exclusive license. Because of this, one distinct possibility is that there will be no “exclusive license” announcement. EA and the CLC could say that there is no real exclusive, and that 2K Sports simply made the decision for internal reasons. This would spare EA a direct public relations hit, and some are already making this suggestion.

Overall, this is terrible news for sports gamers, as the March Madness is a poor video game. But no final announcements have been made, and there is a slight possibility that things can change in the upcoming days. (Though don’t hold your breath.)