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Volume 21 No. 2
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NBA agrees to extension with EA, 2K Sports

“NBA 2K11” and “NBA Jam” have been popular titles for the video game makers.
The NBA has signed multiyear contract extensions with EA Sports and 2K Sports, its two video game partners, continuing its dual-licensing structure.

The deals allow each company to develop both simulation and more casual-styled games with league and team intellectual property for a variety of platforms, including consoles, online, social media and mobile. Financial terms were not disclosed.

“This remains the appropriate course of business for us to take,” said Sal LaRocca, executive vice president of NBA global merchandising.

“Competition brings out the best in the market, these two companies have emerged as the two best brands in the market, and gaming remains one of the cornerstones of our industry.

“The industry has really changed so much in the last few years. When we did the last round of deals with these guys [in 2005], there was no Wii, no iPhone and no Facebook yet. The space, obviously, is going to continue to change dramatically, but we remain very confident moving forward with these two.”

EA Sports has been an NBA licensee since 1991, and 2K Sports since 1999. The current deals are scheduled to expire after the 2011-12 NBA season.
For EA Sports, the extension gives the company sufficient runway to recoup a multimillion-dollar investment it has made in retooling its troubled NBA simulation game franchise, most recently called “NBA Elite.” The latest version of the game was scrapped from retail release last fall amid widespread quality control concerns. EA subsequently shifted production of the game from its EA Canada studios outside Vancouver to its Tiburon facility in Orlando.

EA Sports will take another year off from releasing a simulation game and put out a new title in that category in the fall of 2012. Its revival earlier this year of the classic arcade game “NBA Jam,” meanwhile, has been a strong sales performer on iTunes for the iPhone and iPad.

“Basketball remains a key part of our DNA,” said Jordan Edelstein, EA Sports vice president of marketing. “And the NBA has been one of our very best partners, and a property that really understands technology and how the world, and gaming specifically, is changing.”

Take-Two Interactive’s 2K Sports, meanwhile, will seek to extend a dominant run in which its “NBA 2K” series has grown into one of the top sellers of the entire video game business. “NBA 2K11,” featuring a return of NBA legend Michael Jordan to basketball video games, has sold more than 4 million units and is the best-selling title in the history of 2K Sports.

“NBA 2K12” remains on a normal production schedule and will be released this fall regardless of what happens in a likely fractious labor battle this summer between the NBA and the National Basketball Players Association. EA Sports has been proceeding on a similar path this year for its popular pro football title, “Madden NFL,” while the league’s lockout of the players continues.

“It’s all systems go,” said Jason Argent, 2K Sports vice president of marketing. “We’re going full tilt to push beyond what we did this year.”