One of the sports’ most successful commercial agreements has come to an end after nearly three decades.
Months of heated discussions between Electronic Arts and FIFA, soccer’s global governing body, ended with no agreement to renew a relationship that had produced a cultural phenomenon rather than a phenomenally popular game.
The present agreement, which was set to expire after this summer’s World Cup in Qatar, has been extended to include the Women’s World Cup. After the event, 150 million FIFA video game players will have to adjust to a new moniker for the series: EA Sports FC, according to the business.
The game itself will remain largely unchanged. Even though the World Cup and other FIFA-controlled events will no longer be included, most of the world’s top clubs and stars will still be playable thanks to individual license deals with their teams and leagues. Even still, the game’s continuation does not change the rebranding’s seismic character.
The initials FIFA are a one-word shorthand for a video game series that has grown to provide the backdrop to the lives of players ranging from Premier League stars to casual fans for millions of people across the world. Through their digital doppelgängers, even gamers with no prior connection to the sport learned about its stars and teams.
Because of its widespread use, EA Sports and FIFA have made a profitable partnership: the game has sold more than $20 billion in the last two decades.
But the signs of a breakup had been there for months. While the dispute was undoubtedly rooted in differing financial expectations — FIFA was seeking at least double the $150 million it receives annually from EA Sports, its most important commercial partner — it was also clear that there were differing views on what should be included in a new agreement.
FIFA’s need for exclusivity would have limited its options in the digital realm, where new games and platforms have developed with the potential to generate significant revenue streams. The company has already signed contracts for a number of soccer-themed games, some of which will be released before the end of the year.
However, such games will not have the same match simulations that fans of the EA Sports edition have grown to expect. Customers will have to wait until 2024, when FIFA plans to release a competing soccer simulation game.
“I can tell you that the only genuine, genuine FIFA game will be the greatest accessible for gamers and football enthusiasts,” stated FIFA President Gianni Infantino. “The FIFA name is the only global, original title,” he said, implying that the organization would recover it for its own game.
The most recent EA Sports-FIFA agreement was struck ten years ago, but the intervening years were marked not only by enormous technology development but, perhaps, even greater upheaval at FIFA, which came close to collapsing after a major corruption scandal in 2015. Infantino has sought — and failed — to open up new revenue streams since taking office that year.
When direct talks between Infantino and Andrew Wilson, the CEO of Electronic Arts, failed to produce a breakthrough, the two sides agreed to an amicable split, according to Wilson.
In a telephone interview, Wilson, whose personal association with the game dates back two decades, said, “It was really about how can we do more for the players, more for the fans, how can we offer them more modalities to play, how can we bring more partners into the game, how can we expand beyond the bounds of the traditional game.”
According to those involved with the talks, FIFA requested the ability to link its brand to other digital items, including other video games, in addition to a doubling of its licensing fee. That proved to be too much for EA Sports, who now have to persuade legions of ardent fans to accept a new moniker.
FIFA now has the opportunity to pursue new prospects. However, duplicating EA’s game will be difficult.
The significant difficulties any challenger will encounter in questioning EA’s dominance in the industry were part of EA Sports’ calculation in separating FIFA, the business, from the game that held its name for a generation. Thanks to more than 300 other such licensing agreements with organizations like UEFA, which oversees the Champions League, and domestic leagues and competitions around the world, it now has virtually complete control over the soccer gaming industry.
These agreements allow EA to use the names and likenesses of not only players, but also notable teams, leagues, and competitions in their game. On Tuesday, the firm took advantage of its ties, announcing that some of the world’s largest clubs — as well as some of the tiniest — were side with EA Sports over FIFA.
Many of those rights will limit FIFA’s options as it seeks a new partner. For example, EA Sports FC users will have exclusive access to the world’s two most prestigious club competitions: England’s Premier League and European soccer’s premier Champions League.
Richard Masters, the Premier League’s chief executive, stated in EA’s statement announcing its separation from FIFA, “EA Sports is a long-term and valued partner of the Premier League, and we look forward to continuing to work together in the new age.” Officials from Europe’s and South America’s regulatory organizations, as well as the heads of the German and Spanish leagues, contributed to the statement.
A comment from Nike was included in the message, possibly indicating possible commercial opportunities. Because FIFA is sensitive to its commercial partners, EA Sports has been constrained in its commercial efforts under its current arrangement with FIFA. With that ban lifted, Wilson stated that EA Sports will seek out more firms and brands to collaborate with, potentially allowing for direct-to-consumer sales of team jerseys and other merchandise.
The commercial success of the FIFA game is largely due to EA’s ability to capitalize on soccer’s seasonality; in many cases, the company has made only cosmetic changes to its offering — such as a well-known player wearing his new team’s jersey or a club promoted from a lower division — while presenting it as a brand-new product on an annual basis.
“If not No. 1, it’s clearly in the top three game franchises of all time,” said gaming analyst Sutcliffe. “And that’s because there are so many releases.” Every year, they change the number on the box, put a new player on the front, and under the hood, it’s pretty much the same.”
The evolution of how the digital world is changing was a sticking point in the negotiations between FIFA and EA Sports. Newer products and games, such as Fortnite and Roblox, are viewed as digital worlds as well as games, which FIFA has sought to capitalize on by licensing its name in other products.
EA Sports notified FIFA that it would not be willing to share a name that has become synonymous with the video game industry.
“I’m going to say, ‘Wait a second: We’ve spent literally hundreds of millions of dollars constructing this, and you’re telling me that Epic Games can come in and obtain a license to the name that we’ve established and that has become synonymous with games?” When rumors originally broke that EA and FIFA would part ways, Peter Moore, the former head of EA’s sports group, told The New York Times.
EA’s financial approach for FIFA has changed throughout time, with profits increasing as a result of innovations like player packs, which are comparable to trading cards and force users to spend money in the game to assemble the finest squads. Last year, one analytics firm claimed that EA Sports’ in-game feature Ultimate Team was worth up to $1.2 billion.
A breach with EA Sports and the loss of its nine-figure license payments would be a risk for FIFA President Gianni Infantino, who announced last month that he would run for a third term as president and promised ever-larger payouts to the 211 soccer federations that vote in the election. The upheaval in FIFA’s commercial department has also complicated matters. Kay Madati, who was hired with considerable fanfare last summer, resigned this month after less than a year on the job, making her the third head of commercial since Infantino took office in 2016.
FIFA’s attention is currently focused on the World Cup in Qatar. EA Sports CEO Andrew Wilson has promised that the final release of FIFA — the game — in September will be the biggest yet. He also expressed hope that this would not be the final World Cup game developed by EA Sports, and offered an olive branch by stating that a separate agreement with FIFA may still be reached.
“Through the game, we’d hope to continue to represent the World Cup,” he stated.