Editorial: Are Payoffs Bad for the Industry and is Microsoft Paying Off EA Sports?

Payoffs have existed in all industries for a very very long time. You can't argue they exist, but do they do any good for the end user?

The most recent gaming related payoff centered around Microsoft and Rockstar, with a $50 million purse headed to the developer for the exclusive rights to publish two episodic packs for Grand Theft Auto IV for the Xbox 360. Many can argue this is good for gamers, but Loot Ninja disagrees.

[Rooted_Dust]

While I'm sure Rockstar could put the money to good use, developers should never show favor to one side of a multiplatform game. It they are going to favor one console over another they should just make it exclusive and make the best game possible. No one wants to play a substandard version of any game.

[drunkpandas]

You put it perfectly

[tplarkin7]

The HD-DVD group wants support, and there's nothing wrong with spending money to get it. Do you think Sony didn't spend money to get Blockbuster's support? Do you think Blockbuster chose Blu-Ray because it holds more data? No way. There was a financial interest of some kind for Blockbuster.

[Lord Anubis]

blockbuster chose blu-ray because the consumer demands it. it has nothing to do with storage.

[Ignorant Fanboy]

If the consumer demanded anything it would be to carry both.

Do you think customers went in and rented a Blu-ray, and told the cashiers to stop renting out HD-dvd??

That is a retarded comment, right now the consumers dont know what Blu-Ray or HD-DVD is.

[boodybandit]

"thats the dumbest thing Ive heard."
Should never be used on the interent while making any point. I keep having the dumbest thing I have ever heard trumped daily on the net.

[DrPirate]

Payoffs AKA "moneyhats"

This has been going on in the industry since the days a certain action figure making company bought exclusive rights to G.I. Joe and a rival company bought Teenage Mutant Ninja Turtles.

Point: This practice is legitimate and as existed for a long, long, long time.

[WilliamRLBaker]

I agree fanboy that was pretty stupid, last i checked most consumers didn't even know the difference between the 2 formats or that their was a new format, I certainly never went in and asked and never saw any one.

we all know it was a pay off by sony *laughs*

[XxZxX]

ignorantfanboy, i think you are the dumb person here.

In order to replicate all blu-ray & HD-DVD stock throughout nationwide store need huge money. By judging from their online store experience, they found out the demands are there for blu-ray movies. So instead of focusing on both Blu-ray & HD-DVD, they can start by focusing on blu-Ray on storewide and continue HD-DVD on online. If HD-DVD online demand increased significantly, i'm sure they will add in HD-DVD to storewide as well.

So Instead of calling out ppl dumb, think it through first. If you can't figure that out. The dumb is you.

[Lord Anubis]

ignorant fanboy, congratulations you made me laugh. Its obvious you did not read the press release so I'll let you on the dark to continue amusing me. :)

[poet215]

I thought it was just me that noticed all of the Xbox360 stuff on the new Madden 08 commercials. It's almost as if that's the only version of the game being promoted. Perhaps MS helped pay for the ads, maybe not. None of us really know. But I do believe something shady went down. Even if 360 was the lead platform, PS3 still should've gotten virtually the exact same game. That was a subliminal message in itself. MICROSOFT WILL NOT REST UNTIL THEY OWN THE GAMING INDUSTRY. Madden, GTAIV, all the exclusivity wars goin' on now......all that stuff is just the tip of the iceberg. Hell I was a big Nintendo supporter growing up. I had a Genesis too, but my clear favorite was Nes & SNES. Playstation was in stores for 3 years until I got my first one. I was very reluctant to convert over, the controller had too many buttons, etc, blah blah. All we can do is accept change for what it is, or fall back & find something else to do. I like 360, but I prefer PS3 by far.

[thereapersson]

Since they can't get anything through reputation and trust, they have to buy their way through or financially infiltrate everything.

[drunkpandas]

Yes, the HD-DVD camp payed Paramount and Dreamworks Animations. There's no evidence it was Microsoft, but they are a big supporter of the format.

[Rooted_Dust]

I don't know what stake MS has in HD-DVD, but they didn't pay off Paramount. HD-DVD is Toshiba's media format not MS's.

[thereapersson]

Media and news sited across the board seem to have some impression that MS has a hand in this.

[Charlie2688]

actually after reading this quote

"Microsoft denied paying anything, but wouldn't rule it out as a tactic in the future"

from this article http://crave.cnet.com/8301-...

I wouldn't be surprised at all if they actually did or will do it

[thereapersson]

I'll take that as proof against the argument, BUT, given MS's past track record, it's pretty easy to think they are more than capable of doing that.

[Aeroglyphics]

Microsoft has stated several time that it wants to move to downloadable content as is distribution means. With Blu-Ray and HD-DVD battling it out, Microsoft can just swoop right in and establish downloadable content as the superior way to get your HD content. For them the best possible situation is for neither format to take root.

[WilliamRLBaker]

and by your statements in this topic we can tell your one of those conspriacy nuts that think microsoft is the root of all evil, and that their products must suck so they brain wash people into using them right?

Yes no one trusts microsoft they create crap products and pay every one off to brain wash them to use the product....yeah...........
In reality microsoft is just a company, and this is capitolism, if you dont like it move to china....oh wait i forgot communism has the same failings.

[EDF 2017]

Microsoft did not pay off Paramount or Dreamworks, they don't need to they have their download service as backup. Microsoft's download and the most successful yet, they have no motives to pay anyone off.

Why do PS3 fanboys search and search and think and think of reasons why PS3 games run like crap compared to their 360 counterpart, face it you wasted $600 on an inferior machine which receives inferior games.

Killzone 2 looks average, but all of you are drooling. If you want to see real next-gen go look at Gears of War screens or Mass Effect screens from the campaign, that is what a high production value game should look like. For the money they have invested on Killzone 2 it should look photo real, but it doesn't even come close, much less pass Gears. They won't even break even on that game ever!

Hey douche bag below me: Come back when you have real proof Microsoft paid anyone. Their download service doesn't depend upon either format. If Microsoft did fork out the cash I hope Blu-Ray dies and the PS3 dies with them. HD-DVD for the win this holiday season, there is no denying that now. Quit your crying.

[thereapersson]

Just google "Microsoft Pays Paramount" and see what search results you get.

http://dailysellout.com/mic...

http://digg.com/hardware/Mi...

And this gem of an editorial @ thedigitalbits.com

Boy... crazy day today, huh? As you may have noticed, the site's been up and down today because of all the traffic, but it should level out again soon. Nothing like a format war to liven things up around here.

"A house divided against itself cannot stand," goes the quote. Abraham Lincoln, of course, was talking about the fledgling United States back in 1858, but his words apply surprisingly well today, when reflecting upon the current state of the high-definition format war.

On that note, we've got tons of follow-up e-mails and phone calls out this afternoon to the all various studios and industry observers associated with said format war. And I'll tell you, based on some of the conversations we've had today (both on and off-the-record) with insiders in both camps and in between, when it comes to this morning's high-def news, there's a LOT more going on behind-the-scenes than meets the eye. You have NO idea. If you think the situation is as cut and dried as the press releases (or Harry's entertaining latest post over at AICN, not to mention the 'talk backs' that follow it) would make it seem, you're kidding yourself. Hollywood's on fire right now - at least the studio home video portion of it. And the retailers... and the manufacturers...

Like it or not, things are going to get VERY interesting in the next few days and in the weeks ahead. You're going to see a lot of reports on all this in the media, like this one at the Wall Street Journal, in which DreamWorks chief Jeffrey Katzenberg basically acknowledges that his company received financial incentives to go HD-DVD exclusive - incentives which included "both cash payments and soft incentives such as marketing promotions" according to the story.

By the way, a quick side comment here. A number of HD-DVD fans have e-mailed us to cry fowl over our issue with Microsoft offering financial incentives to studios to go HD-DVD only, when (they say) Sony must surely be doing the same thing on the Blu-ray Disc side. Here's the difference, and it's why we continue to flag it: Sony pumping money to various studios and parties to promote Blu-ray Disc make logical sense to us. Toshiba doing the same thing to promote HD-DVD, that makes logical sense too. Sony was involved in creating Blu-ray and has a financial stake in it. Likewise, Toshiba created HD-DVD and has a financial stake there. Where does Microsoft's interests lie? Microsoft did not create HD-DVD. Until not so very long ago (prior to these formats coming to market), as they themselves acknowledge, they actually supported both formats. So why are they putting so much money into HD-DVD now? Not only are they putting money into HD-DVD, they're basically the only party that's keeping the format alive. Left to their own financial means, we find it hard to believe that Toshiba would be able to keep pricing its hardware so low - especially given the fact that they've had to adjust their sales projections for the format downward in recent months. And without the "financial incentives" offered by Microsoft, would ANY of the HD-DVD exclusive studios still be HD-DVD exclusive? We doubt it. So what does Microsoft have to gain from all this? That's the question that keeps sticking in our minds. By making these deals with the studios, aren't they getting exclusive access to new high-def transfers that they'll be able to turn around and offer on Xbox Live - transfers that they themselves are encoding in VC-1 for the studios at a discounted rate or even for free? And as we've said many times now, doesn't Microsoft's download service stand to gain if this format war continues long enough to discourage most consumers from adopting high-def discs at all? That's the difference between Sony and Microsoft - Sony is heavily supporting their own format for obvious reasons. Microsoft is heavily supporting someone else's format for their own reasons, some of which are obvious (VC-1, HDi) and some not so much.

Anyway, there are going to be lots of quotes from studio suits about all this high-def news in the next few days and weeks. Some of it will true and some will be bullshit, and much of it will be a combination both. Yeah, I know... a lot of you guys are as sick of reading about this format war as we are of writing about it. But you can bet there will be reaction to (and even fallout from) today's announcements, and lots more testy exchanges in the media between the two camps, and we're right in the thick of it. So watch this space, folks.

In the meantime, we'll be back with Barrie's latest Classic Coming Attractions column in time for your morning coffee. So stay tuned...

Bill Hunt, Editor
The Digital Bits
[email protected]

------

Not to mention you yourself are a rabid 360 fanboy, so you really have no room to say anything negative about anything PS3 related at all.

[taz8080]

these format wars are killing me, i was watching heroes last night and found out season one will be released the second week of september but only on HD DVD, no blu ray love??!?! Now games and movies are going to become select, it is gettign a bit out of hand.

[beavis4play]

they have the proof you seek. paramount was paid 150 million for an 18 month exclusivity deal with HD-DVD.

[thereapersson]

Now you are resorting to name calling. Pretty mature there, buddy. Or did my reply turn your fanboy rage meter to full, causing you to get mad at words on a computer screen?

EDIT: And to those nerds who are proponents of DLC, this in particular highlights why MS may have more of an interest in this than people might think.

"So what does Microsoft have to gain from all this? That's the question that keeps sticking in our minds. By making these deals with the studios, aren't they getting exclusive access to new high-def transfers that they'll be able to turn around and offer on Xbox Live - transfers that they themselves are encoding in VC-1 for the studios at a discounted rate or even for free? And as we've said many times now, doesn't Microsoft's download service stand to gain if this format war continues long enough to discourage most consumers from adopting high-def discs at all?"

[WilliamRLBaker]

you talk a big talk, But in reality if it was reversed the first words out of your mouth reaper is GO SONY GO! sony can do no wrong.

Just by the attitude towards microsoft you've shown in this topic, and on n4g in general it is easy to tell that your very anti microsoft.

Well this is capitolism deal with it, When it comes down to it microsoft is just a company and simply does what all other big companies do to survive, and thats WIN, there is no survival for the loser, only for the winner.

Oh and by the way every one that has said that microsofts stake is digital distribution...Last I checked SONY talked about it more then microsoft, and infact said the future of playstation is....DIGITAL distribution...

[InMyOpinion]

So you don't think Sony pays Konami and Square to keep MGS and FF exclusive on the PS3? How naive are you? It's part of the game.

[drunkpandas]

That's a different beast. Paying to keep games exclusive is one thing. Paying to make part of the game better on your platform is another, which is what the issue is here.

[taz8080]

Payign for exclusivity is one thing but limiting content to certain systems is just worng. IMO why bother launching it on other ocnsoles if it will be done so half assed or incomplete?

Just think if FFVII would have been launched ont he xbox but you only got half the game and hten the other half was available to SONY users as a download???

Payola is bad news, and it is very evident right now witht he different movie formats, HD DVD and BluRay. I am positive people are paying visits tot he movie studios with barrels of cash saying "so you see the advantage of our format right?"

In the end the consumer loses, whoeve invests in one or the other will lose somehow.

[beavis4play]

sony has stated repeatedly for years that they don't pay for exclusivity. mgs4 and ff could both go to other systems if the companies that make them want to. i'm only letting you know so you don't continue to make an a$$ out of yourself.

[InMyOpinion]

@beavis4play - You are the one asleep if you trust everything (anything) greedy multinational corporations like MS and Sony say. Sony also repeatedly stated that all PS3 games would be in 1080p and kill the competition. 200 fps and blablabla. Look what they gave us. You must've been asleep at the time of those announcements...

@drunk pandas - Good point, did'nt think of it that way. Makes it even uglier. Still, is it only MS fault? Does'nt Rockstar have any responsibility for accepting the bribes? I have'nt heard any one bashing Rockstar about it, only MS who gets the blame.

[CaliGamer]

Dirty politicians have been using payoff strategies for decades to stay ahead or to gain a lead, why would MS, be any different? Its an effective and arguably underhanded tactic but in the end its business.
MS wants to gain market share this generation, and the most direct way is to pump money into the process. Perhaps other companies do this too, but MS looks to be one of the most overt cases in a long time.
Is it better for the industry? Depends on what your outlook is. I could care less if a game on the PS3 goes to another console, indeed, I prefer for a good gaming experience to be available to all people who share my hobby regardless of the system they own. Some people like bragging rights over "exclusives", so they will say that this sort of activity is just fine.
The gaming industry has proven itself to be very lucrative, and as such this is just the beginning of this sort of thing. Get used to this, I am sure this isn't the last we will see of this type of story.

[mistertwoturbo]

yes and MS has a lot of money to pump pump pump

[SIX]

..........

[Why_So_Serious]

i just wish they'd stfu about it

[power of Green]

Sony fans are a different breed indeed. Whatever makes them sleep better.

[thereapersson]

360 fans can be just as bad. Then again, even people such as yourself can turn around and say something Neutral for once, which I have witnessed before.

[shodown19]

Peter Moore Joining EA and EA's Exec joining Microsoft should be enough proof. It's obvious that they are in cahoots with each other. Just before Moore announced his departure, he made sure to trash the PS3's sales in Japan. Which would make sense due to the XBOX not selling well, so he focuses on a partnership with american publishing giant Electronic arts.

Is it surprising that EA has placed PR statements professionally bashing the PS3 since Peter Moore has joined the team? Last year, EA developers were praising the PS3 when developing Madden 07 for said system. Now this year it's all about " Getting the best experience out of the console".

Not to mention, this time period is the first time period where EA doesnt have to side with a Japanese company to primarily develop it's consoles and advertising to. By the time the original XBOX came out, Madden and other franchises were well established on the PS2 so it didnt make since to focus on a platform with less market share.

Just a little bit to think about. Microsoft arent the bad guys, but Electronic Art$ are and havent gave a damn about consumers for quite sometime.

[smack]

At what point are people going to realize that games and game consoles are just part of the larger world capitalistic society?

Neither Sony, Microsoft or Nintendo give a damn whether you are satisfied as a customer,gamer or person. To them you are merely a consumer, and they want your money.

There are no benevolent companies; they do not operate for your personal satisfaction. Each company conducts themselves in order to maximize market share and ultimately profit. It is simply survival of the fittest, and they will each use whatever means necessary to wipe out their competition. It is neither moral nor immoral, it is the nature of business.

[ChekkinChinz]

I used to love MS but I recently began to dislike them because I started to realize that they only care about money and that their products are defective most of the time. I know that in the gaming industry it boils down to money but it seems to be only about money with MS. They come off as souless IMO. Back in the NES,SNES,SEGA Genisis,N64 and PS1 days it was more about the culture/hobby of gaming.
Remember when we gamers use to go to KBTOYS and get a game and not argue about which system is better?...Now, we have to defend our systems because of fear that our console will be killed by the opposing consoles.(SIGH)........

[BADBOYEK4]

SONY did the same thing to the Dreamcast.

[taz8080]

"Back in the NES,SNES,SEGA Genisis,N64 and PS1 days it was more about the culture/hobby of gaming.
Remember when we gamers use to go to KBTOYS and get a game and not argue about which system is better?...Now, we have to defend our systems because of fear that our console will be killed by the opposing consoles."

Very F#$%ing true, there were rivalries between Sega and NES but it wasnt like now, where the fanboys jumpout at each other and rip each other to shreds. Everyhtign was simpler then, box art, advertising, magazines, etc. I guess this is the price we pay since video games hav become a major market and are being run like large business practices now. Just wonder what will happen in twenty years, when in game advertising and the such are rampant!?

[ChekkinChinz]

No, Sony didn't do that to the Dreamcast. The consumer did that to the Dreamcast. I owned a Dreamcast and whenever I tried to get my peers to buy one they would stay loyal to Sony, no matter how kickass the games were on Dreamcast. MS wants to make descisions for you without even considering the thoughts of the gaming society, they don't give 2 sh*ts about what the gamers want(as long as they make killer profit). Nintendo,Sega and Sony at least gave 1 sh*t about us gamers.

[540damn]

internet message boards back then. seems like it brews a lot of fanboyism. we should all quit posting. then we wouldnt have to worry about this worthless stuff. its addicting entertainment though. i find myself only clicking on articles with fanboy controversy. I havent even checked the new video of Killzone 2 yet. seems like a lot of us are more interested in the consoles war than the content of the games for them.

[beavis4play]

so what if ms got this deal with gta4. rockstar could put out content exclusive for the 360, then put out different exclusive content for the ps3. then both systems get something.

[drunkpandas]

In the deal, Microsoft paid so there would be no other downloadable content except for that on the Xbox 360.

[Aeroglyphics]

Although this article is just hearsay, I too noticed the Madden 08 commercials during the football games. If one thinks about it, there really is no logical reason why EA wouldn’t list all the platforms Madden 08 is going to be on. From a business standpoint all they are doing is cutting there sales by not informing that the game can be bought on other systems. Granted the majority of people know It’s a multiplatform game, but something like that is never assumed when these large corporations advertise their products.

[razer]

There is no conspiracy here it's called business..

Sony does it, MS does it and you are a complete fool to think otherwise.

MS paying off EA sports to me seems wrong. Why would EA and its shareholders want to make a crappy version of a game on a particular platform and ruin their reputation as a game developer. Those short term "pay-off" gains don't mean squat when your reputation is killed.

This is an editorial piece and bases it's claims on pure speculation. Even EA came out and said they were having programming challenges on the PS3 that's why it's only 30fps.. But oooooh no, that isn't good enough somebody has to accuse MS of some kind of payoff.

Could it be that since the 360 has the largest install base that caters to these types of games that they are being given a bit more attention?? Just like they did last gen with Sony.

[Aeroglyphics]

I'm not saying they shouldn't be catering to the biggest install base, because they should. What I'm saying is, when advertising their products shouldn't they try to appeal to as many people as possible. Why make a product for the 360, PS2, PS3, Wii, and PSP and only advertise it to be on the 360. Why not tell the average uninformed consumer that their console of choice carries that game too. Business wise that makes zero sense. If you could explain AE's reasoning behind this advertising decision that would be great, because I frankly can't think of one reason they would do that.

[trueltie5]

To answer your question because EA didn't care because of the lower install base of the PS3...The PS2 is where EA was making all of their money on for Madden....I can assure you that MS gave EA a lot of Co Marketing $$$$ ! Trust me it's quite clear with this madden launch/advertising...now did they purposely make the PS3 30fps to better the 360 ? I doubt it...MS really likes blowing money like rappers do with fancy shoes, jewelry, and grillz ....LOL

[taz8080]

"MS really likes blowing money like rappers do with fancy shoes, jewelry, and grillz "
Great analogy! and this is true, MS throws its marketing budget around and makes no attempts to hide it. They always try to be over the top and this is also evidenced by the EA MS launch party in NYC, ( www.loot-ninja.com/2007/08/15/ ozzy-rocks-madden-launch-event/ )
they took over times square to promote and had Ozzy!! Just have a money fight while you are at it.

[joevfx]

pay off definitly hurt the industry, no matter which way you look at it in the end games and movies are art. you have artists makign them. i think its sick that a company can pay another to not share their art with everyone thats wants to enjoy it.

[BADBOYEK4]

SONY used their Money to Bully SEGA and the Dreamcast, and now MICROSOFT is doing the same thing to them,the only problem is Sony dont have the money microsoft have.

[BIadestarX]

This is what happen when a company with strong influence in the movie industry and the game industry gets greedy.

Was not enough for Sony to own a great pie of the movie industry with the studios they own?

Was not enough for Sony to own the game industry with Playstation?

Aparently it was not enough... they don't only want to make the TV you watch movies or play on, or the console you play games on... or even the player you watch movies on... they also wanted to own/make the format that content is distributed on. You accuse Microsoft of Monopoly.... what what do you call what's Sony is doing? I think Sony is involved in too many things... And they are trying to close all the gaps making them the only company that you buy everything from. Forget that. If Sony wins in all these camps... the next PS3 is going to cost $1,500 and us gamers will have to find another hobby. They already released one of the most expensive consoles ever made for $600...and pretty much got away with it... even after having the xbox 360 for $200 less... If Sony managed to push Microsoft out of the picture.... what choices do we have? None... You want to play games? Pay wherever Sony ask for their next console. Ofcourse Sony fanboys don't mind doing that...

Who's Idea was to mix a game console with the movie industry in order to control the living room? Sony. Not Microsoft.

Sony made the PS3 to be PC, a movie player, and a game console. In order to monopolize and combine 3 industries into one.
Isn't obvious what's going to happen? Movies will become like freaken games... You want to watch this movie? well you need a blu-ray player... how about that one? ohh HD DVD. and this one... you need [enter format here]. Sony managed to take the movie industry to the same state the game industry is. They partition the market. Yes, Many of you have hope that one format will die. But what if it does not? What if both formats get enough support from different publishers and are able to survive without 100% support from publishers?
The game industry works that way... Now the movie industry is working that way temporarily...

But though many of you think that the console model will never happen on the movie industry.. it's very possible. I am sure Sony enjoys how the game industry works... where anyone has to pay royalties to publish content on their console.

I am pro the idea of a single open source format, open console (like PC).... but with companies like Sony we will never see that.

[WilliamRLBaker]

the hypocracy is strong in the fanboy, And even the most hard core in this thread wanna cover up their hypocracy and fanboyism...and conspiracy theories.

[taz8080]

SONY's initial argument to the pricing was that the BluRay player was extra $$$, but then agian they came out with a $100 price break? Interesting how Xbox then retaliates with their own price drop? Coincedence that everyone figured out ways to cut hteir manufacturing costs at the saem time? NO Bull SHiet! It is called product positioning! Plain and simple. SONY decided that having a Blu Ray player in their console was a benefit butt hen agian they wanted to sell their regular players os they couldnt amke their console too cheap, so a year later they drop the price and make a new sku, one with more memory (this is cheap) and a game to make back the $100.

All pricing in the video game industry is fictious, stamping out CD's, DD's , any type of disc is cheap once you are set up to do so. Yet we pay $60 for games?? Doesnt anyone find it intereting that some games come out at launch and are cheaper? Like Resident Evil remake, it isnt becuas eit was cheaper to make it is becasue they need ot position the product accordingly, they dont believe people will pay full price so they di the price. Video game consumers get suckered in all the time.

[ChekkinChinz]

And if MS wins how much do you think the next XBOX will cost?.....$3000. And chances are it will be defective. Listen man, I've had two XBOX fail on me and I am now on my 2nd XBOX 360 and I treat my consoles with the care equivalent to a mother taking care of her child. C'mon man, you can't honestly tell me that MS isn't shady can you?

[BIadestarX]

"And chances are it will be defective." ohh cry me a river.. here it comes the totally unrelated comment. So, basically you are saying that you want one single company to monopolise the movie and game industry.. as long as they make it reliable you would pay any price they ask for? What make you think they will need to make it reliable when you as a consumer does not have any other options?

Did Microsoft tried to monopolize before? heck yeah... that's every companies dream. You don't think Sony would love to make every device you use and buy? duhhh...

But just because Microsoft have tried does not make it right for Sony. And to be honesly I think Sony is trying to be more of a monopoly than Microsoft. At least Microsoft is not making the XBox 360 a PC eventhough they can... The PS3 is a PC that can run linux... has a browser.... can play blu-ray movies... it actually designed to monopolized 3 completely different industries. while the XBox 360 does 1 thing. Play Games.