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NBA 2K is bigger than Madden because it paid for others' failures

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It was delicious watching Strauss Zelnick give the business to someone who doesn't know the business.

Zelnick, the chief executive of the company that owns 2K Sports, was in New York on Friday for a technology conference tied to today's NBA All-Star Game. Bloomberg TV invited him on air to talk about his company and its NBA 2K series, which has grown into a commercial and cultural presence that resembles another franchise Take-Two owns, Grand Theft Auto.

So, Bloomberg anchor Stephanie Ruhle really stepped in it when she threw up her hands and asked Zelnick, "Can you ever see yourself truly competing with something like Madden?"

"We are bigger than Madden, thank you very much," Zelnick replied. "So I would say, can Madden aspire to be bigger than NBA 2K?"

Ouch. (It's in this video, at the 2:15 mark).

What constitutes "bigger" is always an argumentative moving target. In physical sales, sure, Madden NFL 15 outsold NBA 2K15 in North America for 2014. Both have large digital revenue profiles, however. NBA 2K has also shown more growth in traditional measures, particularly since 2009, two years after Zelnick led an investor revolt that restored adult supervision to Take-Two.

In some bad years, NBA 2K's muscle made the entire 2K Sports label profitable

But I can tell you why Strauss Zelnick could look anyone in the eye, say NBA 2K is a bigger franchise than Madden — whose contract with the NFL is believed to be second only to the deals that league signs with its broadcast partners — and not move a needle on a polygraph. It's because of 2K Sports' defunct MLB 2K series, a ball and chain Take-Two dragged into 2013 under impressively stupid terms negotiated by a reckless corporate leadership that Zelnick himself ousted in 2007.

Even while paying off that mistake — estimates ran as high as $30 million annually — NBA 2K's muscle still made the entire 2K Sports label profitable. Not just against the premium paid for the MLB license, but also the NHL 2K series, canceled from consoles after 2010. And in product quality alone, 2K Sports took EA Sports' NBA Live series off shelves for three years without buying an exclusive deal.

Madden was never asked to deliver against anything like that. Hell, FIFA could pay most of the bills at EA Sports.

That doesn't mean there are no victims left over after 2K Sports emerged from its deal with MLB in 2012. As soon as the contract was signed, gamers were immediately left with no choice but MLB 2K. In 2006, when I was working a different job, not following video games at all, I remember asking a GameStop clerk where MVP 06 was. (I was shown, of all things, a college baseball video game.) Over the next six years, MLB 2K's inability to fix its lingering deficiencies easily overwhelmed whatever gameplay or presentation breakthroughs it introduced.

Exclusive licenses don't just buy the pot, they shut down anyone else in the future.

Later in the Bloomberg interview, Zelnick alluded to the forces that would help usher MLB 2K out the door, and which now stand in the way of any proper baseball video game launching on an Xbox platform for the foreseeable future, if ever. "Those very expensive production, marketing, overhead [and] in the case of sports titles, licensing, they do create a risk profile," he told Ruhle. "And from our point of view, it embeds the winners even further. It actually creates a barrier to entry in our business."

That's key. Exclusive licenses on sports video games don't just buy the pot for the near term, they effectively shut down anyone else's participation in the future. The work required to create a simulation quality sports video game from scratch—  with realistic arenas, lifelike players, accurate performance ratings, and broadcast presentation — is well more than any developer could pull off in a single year, especially one contracted by a publisher facing huge licensing costs.

Of major publishers or developers with any infrastructure ready to go on baseball, only Konami (which will publish Pro Yakyuu Spirits 2015 in Japan) could come close, and even then it would have to render 30 major league stadia and thousands of players from scratch. Artists at MLB The Show told me that a single new stadium, in-game, represents about four months of work.

The NBA, I think, understands this. After the rush into exclusive licensing agreements a decade ago, the NBA considered one, I'm told, but passed on it. At the time, EA Sports' basketball title was a more robust competitor to 2K Sports, and that may have influenced the decision. Still, can you imagine where the NBA would be had they gone exclusive with EA Sports in 2006?

NBA Elite 11 may have been a desperate reinvention provoked by the gains made in the NBA 2K series. But it still was a game Electronic Arts was willing to ship until a series of embarassing YouTube videos went public. The circumstances weren't all that different from MLB 2K9, in my view — a horridly flawed and rushed work that still made it onto shelves, and did so because there was no competition.

Zelnick has very good reason to be proud of 2K Sports, principally through what NBA 2K has done, but also because of what he and his company has been willing to let go — the NHL, college basketball, MLB. 2K Sports learned, in very hard and painful ways, that no league's shield will ever make a bad or uninteresting video game better. It must make the best video game on its merits alone.

Roster File is Polygon's news and opinion column on the intersection of sports and video games. It appears weekends.