The former athletes are suing the studio over the use of their names and likenesses without consent or compensation.
EA cited the First Amendment, claiming that as a creator of expressive works, it has the right to use player likenesses freely under California law. The same defence helped them ward off a legal complaint from ex-NCAA football players.
However, the judge sided with the NFL retirees and the case will now be heard in court. The plaintiffs are demanding profits from their likenesses as well as legal costs, according to Gamasutra.
The class action lawsuit dates back to 2010, relating to the Madden NFL 09 franchise. It involves more than 6,000 retired NFL stars.
A date for the court hearing is yet to be announced.
> 'Madden NFL' creator sues EA
Watch a trailer for EA Sports' Madden NFL 12 below: