If someone was to do a survey on what the most important marketing endeavor for the global success of the NBA was? We’re sure many people would go straight for the obvious and say – of course, the best basketball players in the world. Others would say it’s the marketing of the biggest NBA stars, some would answer it is the fashion like colorful jerseys or shoes. Well, we think it’s NBA video games and if it’s not already, then it soon will be. The popularity of games like NBA 2K and NBA Live is at an all time high and video gaming as an industry is growing rapidly. But how much of that money actually filters down to the players that are captured, digitised and controlled by millions of gamers all over the world?
Do NBA players get paid for being in Video Games? Yes. NBA players receive compensation for their images being used in NBA video games. The money is paid to the NBA Players Association in the form of a licensing fee. Currently estimated to be worth around $1.1 Billion. This money will then filter through to players both active and retired.
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How Popular are NBA Video Games?
The sports games industry itself is one of the biggest gaming industries there is with Madden, FIFA, Wii Sports, PES, and many others immediately coming to mind. Looking at the Top 10 best-selling sports games franchises, we find two basketball games – NBA 2k with 90 million and NBA Live with 35 million copies sold respectively. If we were to combine these numbers, we would get 125 million copies, and to put that into perspective, it’s more copies sold than the legendary titles like The Legend of Zelda (103M) or Halo (70M).
Numbers like these prove how profitable the NBA gaming market is, especially when you release a new game every year like EA and 2k do. It should be mentioned that since the arrival of Take-Two Interactive in the NBA gaming business back in 1999 we’ve seen a steady decline in numbers for EA. This decline culminated in 2019 when EA decided not to pursue the new licensing deal with the NBA. The reason for that is the exclusive licensing agreement between NBA, 2k Games, and the National Basketball Players Association (NBPA) signed at the start of 2019.
Who Owns the license for NBA computer games?
The previous agreement for the video game licensing was a dual-licensing agreement with EA and 2k signed in 2011. The new contract is worth double the amount of the 2011 version, and this time only Take-Two Interactive (an umbrella organization of 2k Games) put the pen on paper. The decision not to pursue the agreement is very reasonable from the EA considering how much lower sales are compared to their arch-rival, 2K. Glory days for the EA NBA games are long gone, and since 2008 and the launch of NBA 2k9 they’ve been trailing back more and more, while Take-Two Interactive has been thriving, led by NBA 2K. EA’s latest game edition sales were relative disappointment, while NBA 2k has been gaining record sales year in and year out – often referred to in popular culture as simply “2K”. With over $1 billion in sales for three years in a row of course 2k Games would be willing to pay the $1.1 billion for the next 7 years of NBA licensing. That price remains out of reach for EA at this moment. The exclusivity gained by being the only licensee should see NBA 2K sales rocket even more.
Throughout history licensing was much less important than today. Games like International Basketball, Double Dribble, or GBA Championship were global success stories without any licensing, when Game Play was a massively variable quality and a great game play evolution could push you to the front of the market. But games that had NBA stars in their names were even more popular, the older generation will surely remember 1983 One on One: Dr.J vs Larry Bird. Sources say that these two NBA legends earned $25,000 from the newly established Electronic Arts without the NBA interfering. That started EA’s great rise after establishing itself as the go-to developer when it comes to basketball games. Using star names in marketing continued and has grown more and more lucrative as NBA fandom has become even more player centric vs Franchise orientated. Even though games without licensing were still developed and sold they couldn’t compete with star spiced games like Magic Johnson‘s Fast Break, Jordan vs Bird: One on One, NBA Jam NBA Playoffs, etc.
Is the NBA Video Game licence fee worth it?
In today’s market, there is no space for unlicensed games. People want to play with the real logos, jerseys, players and legends. Days of playing a basketball game without real players are long gone, and it wouldn’t be crazy to think that game developers consider licensing more important than the gameplay itself. This is especially true now that gameplay has evolved, narrowed and refined itself to the point that most Basketball games would operate in a very similar way – regardless of developer. What do you think is more important for game sales: having stars like Kobe and LeBron as cover athletes or the gameplay? Back in the ’90s, it would have to be the latter, but with social media and marketing today, it’s probably rather closely contested.
But where does all that licensing money go? Well, the answer is not really one-dimensional nor completely publicly available. As far as we know the active players do not get any money for their image or likeness directly. The $1.1 billion is paid to the Players Association, and then they distribute the money in certain undisclosed ways. That money could go straight to the players or, for instance, be saved as a safety net for lockdowns and bankrupt players.
This rule does not apply to retired players. They own their likenesses but most of them opted to negotiate through the National Basketball Retired Players Association (NBRPA). Some players opted out of the NBRPA and decided to negotiate individually. The most notable of those players is Charles Barkley. Chuck is one of the strongest opponents of the way video game publishers treat former players. He thinks that the money paid to retired players is insufficient and that they deserve more. He even said that he would allow them to use his face only when they pay $1 million per year to retired players.
Charles Barkley was not the first nor the greatest player to opt-out of Players Association deals. That title belongs to none other than “His Airness” Michael Jordan. In 1992 MJ was without a doubt bigger than the league. That’s why it was much more lucrative for him to negotiate his own deals and sell his likenesses individually. The most notable NBA game developers in the ’90s were EA, with their NBA Playoffs (later called NBA Live) and NBA Jam franchises. The biggest problem for them in the period from 1992 to 1999 was that Jordan wasn’t in their games, well at least not officially. For example, in the 1996 edition players could just type the code” JORDAN” and play with the GOAT, the same could be done in Konami’s NBA In The Zone. MJ returned to the gaming world in the 2000s after he left the Bulls, helping 2k in becoming what it is today. 2K Sports signed Jordan to an exclusive licensing deal, then went all out, creating what is arguably the greatest replication of an athlete in video game history.