Electronic Arts will set up a $27 million fund to settle a class action lawsuit alleging its Madden NFL series was a price-gouging illegal monopoly . To no one's surprise, the biggest payment out of that will be to lawyers.
Terms are subject to a judge's approval, but the plaintiff's lawyers have agreed that when they file their motion for fees—i.e. what they get paid for litigating this four-year case—it'll be no more than 30 percent of the fund. That's $8.1 million. In fairness, that's for four years of work. But it's still a third of this award.
Costs, which would be the plaintiffs' actual expenses or whatever had to be paid out to third parties, plus whatever it costs to administer the payment of this settlement to millions of gamers, are not to exceed $2 million.
Geoffrey Pecover and Andrew Owens, the two plaintiffs who originally brought the suit, are entitled to $5,000 each as a "participation award."
That brings us to you.
Under the proposed terms, anyone buying a Madden NFL, NCAA Football or Arena Football product from Jan. 1, 2005 forward is eligible for a portion of the settlement. A tiny portion. It's $6.79 per title purchased for the PlayStation 2, PC, Xbox or GameCube. (It's amusing that for the purposes of this settlement, the PC is considered a last-generation platform.) It's $1.95 per title purchased for the Xbox 360, PlayStation 3 or Wii. And you're capped at eight titles in each group. So if you've bought every Madden and every NCAA Football on the Xbox 360—an extreme but still plausible case—you're still only getting $15.60.
How that will be paid out, whether as cash, a credit on a purchase, or some other freebie, I don't know. How they'll verify the number of titles a person claims is also not something I understand yet. They can't expect people to have kept their receipts. They can't just take someone's word for it if they check off eight in each group either. The EA Sports server database will probably be used in some way to identify and verify class action participants.
Mathematically, after all the fees and costs are deducted, the greatest number of claims this could pay out would be to 8.6 million individuals claiming $1.95 each. Madden NFL 12 alone sold about 2 million copies in its first month. Neither side expects everyone's going to knock on their door and demand their $2.
And if, after all the lawyers are paid and all the gamers who want their $1.95 get it, there's still money left over in this fund, all of that will be given to the Child's Play charity. So maybe some good can come out of this.