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EA likely to emerge unscathed from FIFA breakup

by George Jijiashvili on 05/12/22 04:38:00 pm   Expert Blogs   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

On 10 May 2022, EA announced that it was parting ways with FIFA – meaning that one of the most successful and longest-running game franchises will carry on under a different name. This is a culmination of a public spat between international football’s governing body, and one of the largest game companies. In October 2021, EA stated that it was exploring the idea of a rebrand of the FIFA series as they 'review their naming rights arrangement' with FIFA, and went on to register the trademark for “EA Sports FC”. It was reported that negotiations broke down after FIFA requested the licensing fee to be increased to $1 billion per four-year world cup cycle.

The FIFA series has consistently been one of the best-selling console games, having sold over 325 million copies since 1993. EA offers FIFA games on PC and consoles, as well as FIFA Mobile – across which it has more than 150 million players. For the 2021 financial year, EA made $1.6 billion from its sports games’ Ultimate Team modes, with a “substantial portion” coming from FIFA Ultimate Team. It made a further $1.6 billion from single-copy sales, which were again significantly driven by the FIFA series. For context, EA’s total net revenue for fiscal year 2021 was $5.6 billion, primarily driven by FIFA 21, FIFA 20, The Sims 4, Apex Legends, and Madden NFL 21.

EA maintains that moving away from FIFA wasn’t purely a financial decision, and that it was primarily a way to take full ownership of the future direction of the series – be that introducing different types of monetization and game modes, or partnering with a wider set of brands. We nevertheless believe that the ballooning licensing fees played a big role in this decision. The publisher says the biggest change for the players will be the name of the game and the lack of World Cup content every four years.

EA is well-positioned for life after FIFA

EA is the clear-cut leader in the football simulation game category, having built up the FIFA franchise for nearly three decades. It has iterated and improved gameplay elements over this period, and has also introduced several game modes, with Ultimate Team emerging as the stickiest and by far the most financially lucrative. In recent years, the publisher has been increasing the prominence of its own brand and placing Ultimate Team at the forefront of FIFA games’ experience. Omdia believes that FIFA’s current player base’s loyalty lies entirely with the game and its game modes, rather than the FIFA branding.

The significance of FIFA branding to EA has gradually waned, especially as EA has acquired and managed all-important licenses for players, clubs, kits, stadiums, and leagues on its own. EA claims to have signed up more than 19,000 athletes, 700 teams, 100 stadiums, and over 30 leagues for future games. This means that EA will continue to provide an immersive, real-world football gaming experience without the FIFA license.

The lack of strong direct competition to EA in the football simulation category further bolsters EA’s position. Konami’s eFootball (previously known as Pro Evolution Soccer), its biggest direct competitor, always struggled to match the FIFA series in terms of the extent of its official licensing. Making matters worse, its latest release, eFootball 2022 was met with an overwhelmingly negative reception from critics and players alike because of the game's poor technical and graphical quality, and its lack of teams and features.

Although EA benefitted enormously from FIFA’s global brand recognition, it’s important to note that as an organization the latter is not without controversy – its actions in the real world can have a negative impact on the perception of EA’s games. We believe that this potential risk was also an important consideration for EA when making this decision.

FIFA has plenty of opportunities in gaming, but it will require a lot of time, money, and effort

FIFA may have overplayed its hand in this negotiation, but it's far from game over for the organization. Gaming is now ubiquitous, with global consumer spend set to reach $206 billion by 2025. As the video games market continues to expand, there will be plenty of licensing opportunities for FIFA. This is especially the case in the mobile space, which offers access to the global audience. The biggest challenge will be identifying the right partners and not diluting the FIFA brand in video games.

In its statement, FIFA said that it is “engaging with publishers, studios and investors on development of major new simulation football title for 2024.” It also revealed that a number of new non-simulation games are already under production and will launch during the third quarter of this year.

FIFA is keen to bank on its brand, but as is now evident, licensing football content is extremely complex and costly – that’s on top of building a stable football game with satisfying mechanics, compelling game modes, and features. We believe that creating a new major football title that can match, let alone beat EA’s offering in a space of two years is overambitious. However, if built with a long-term vision together with a suitable partner, FIFA’s new game may well emerge as a worthy title contender.


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