One of the most popular gaming franchises of all time is EA Sports’ FIFA series of association football (which North Americans like to call “soccer”) games. Now EA’s biggest moneymaker, the FIFA series has had an immense impact on the direction of the company, and really, on the direction of the industry, as well as ripple effects that have been felt beyond just video games as well. FIFA earns over a billion dollars a year from just one mode alone – Ultimate Team. FIFA is one of the top highest grossing video game franchises of all time. FIFA‘s reach is immense, and it routinely tops the charts on every system and in every market it hits. FIFA, the game, has singularly propelled the equity of FIFA, the governing body for association football globally, and has turned that organization into a household name, where otherwise, the average person might not really have known off them off the top of their heads. Indeed, EA Sports’ games, FIFA, the body, and the sport itself, have formed a sort of symbiotic relationship, where each benefits from the others, and each in turn boosts the others.
Given this extremely long running and successful partnership between FIFA and EA, then, one must ask – why exactly would either party be looking to rock the boat? All logic would dictate both would be happy with the current state of things, and want to keep the gravy train going. But the thing about EA and FIFA both is that they are highly profitable organizations that will stop at nothing to earn even more money. Rolling in billions isn’t enough if they could be rolling in tens of billions – what one might do with that kind of money is besides the point, the point is that EA and FIFA aren’t happy with earning enough money to buy a nation, they want enough money to buy many nations.
Which is why the report (accompanied by official confirmation from EA) that the video games might look to rebrand and move away from the FIFA naming wasn’t that surprising. Viewed from the cynical lens of profit maximization, it makes total sense. After all, from EA’s perspective, why is it continuing to have the recognition of its biggest IP be held ransom by some other entity? FIFA is among the biggest and most recognizable names in the games industry, and that work was put in by EA, not FIFA the body. Why should EA have to not only pay FIFA money to be able to make money off of a product that they built themselves, but also constantly live in fear that that name could be taken away from them? The name that they built up?
You can see this from FIFA’s perspective too. While EA may have built the games, their initial success came from their “official” status, which they piggybacked on using the FIFA name. And FIFA, the body, doesn’t get a lot from the games’ billion dollar success either. While the EA Sports arrangement is their most lucrative commercial contract at $150 million a year, per a report from New York Times, that looks like a pittance, positively quaint, compared to the billions the games are bringing in yearly. Plus, it appears likely that the original agreement FIFA made with EA simply did not (and could not have, to be fair) take into account just how much video games as a market and a medium have changed in general, and FIFA in particular. Not too long ago, the arrangement was simple – EA Sports licenses the name from FIFA, sells the game, and pockets the money.
Now, on the other hand, FIFA games have become an ecosystem unto themselves. Tournaments, sponsorships, collaborations with other football organizations, and of course, the elephant in the room that is Ultimate Team, not to say anything about future monetization opportunities such as NFTs (explicitly mentioned in the NYT report as a potential future revenue stream EA is looking at) – it is entirely possible that if FIFA, the organization, had known that these kinds of further monetization opportunities (using their name, admittedly their name as popularized by EA) would manifest, they would have drawn up a contract that cut them a share of those earnings too.
Which explains the problem – FIFA wants more money. EA Sports doesn’t want to hand over more money. Within the cold context of profit driven capitalism, both are right in their place. FIFA isn’t wrong to ask for more of a revenue share from money generated in part by using its name. EA isn’t wrong in not wanting to share the money that has been generated almost entirely as a result of the work that they alone put in – as mentioned, FIFA, the body, wouldn’t even haver the kind of name equity they have right now had it not been for EA, after all.
Under the new deal, FIFA is looking for $2.5 billion every four years. Reportedly, FIFA additionally wants to restrict EA’s monetization opportunities to a more narrowly defined understanding of “video games”, meaning EA could potentially lose out from monetization opportunities such as FIFA video game tournaments, streams, and collaborations.
For EA, obviously this is an issue – not only does this put the production cost of every individual FIFA game at over $600 million before even a single minute of development work has been done (and even in the modern AAA landscape, that’s an insanely high production cost), it also cuts down on the potential revenue streams they could leverage to compensate for that higher production cost too. Which is why EA has done the unthinkable, and suggested it will probably just drop the FIFA branding entirely, and go it alone.
For EA, this is actually a surprisingly viable move, now more than ever. 20 years ago, losing the FIFA name would have probably been catastrophic – FIFA, the body, would probably have licensed it out to some other company who could have had a new game ready in a few months, and the average, less engaged customer (which, remember, is the bulk of people who buy FIFA) would have been confused and probably gone for the new officially licensed FIFA game. EA would have lost out on sales, and no amount of marketing would have helped to compensate for the loss in brand awareness.
Those are not circumstances that hold true today. Thanks to social media, any such change would be immediately telegraphed to the tens of millions of people who play FIFA yearly – in fact, it already has been, thanks to the reports and think pieces like this one we have been seeing these last few days – and if EA were to release their new game as “EA FUT 2023” or whatever (more on this in a minute), customers would already know it’s the “true” FIFA 23, regardless of whether or not FIFA ends up commissioning a separate “official” game to bear their name.
That’s the other thing, though. 20 years ago, game development wasn’t as resource and time intensive as it is today, and a new company managing to make a mostly functioning and competent football game from scratch wouldn’t take more than a few months – maybe a bit over a year. Today, games can either take years to develop (particularly if you design them from scratch), or require a fully developed pipeline and tech stack to be able to churn out content on an ongoing basis – which no other company other than EA has for football games. Meaning that even if FIFA turns to, for example, 2K Sports, and has them develop an official FIFA branded football game, it will be a few years before the product is actually ready to hit the market – meaning FIFA loses out on a few years of revenue, and EA gets those few years to itself to be able to properly establish its new brand.
The other thing is, the FIFA license from EA is literally just for the name and the World Cup content. The reason FIFA is as popular with players as it is is because of its “official” status, sure, but that official licensing is actually the result of over 300 exclusive licensing agreements EA has made with clubs, local football governing bodies, teams, players, and FIFPro, which collectively allow EA to use the names, likenesses, and brands of clubs, stadiums, players, and more. Losing the FIFA name not only does not lose EA those other licensing agreements – in fact, EA just renewed its agreement with FIFPro (which is the biggest one in terms of granting it player likenesses and names) – it also doesn’t mean that whatever other game FIFA commissions will have those likenesses and such. Remember, a lot of EA’s arrangements are exclusive – so if EA’s agreement with the Premier League clubs is exclusive, then it won’t matter if FIFA 2K23 is “official”, it still won’t let you play as Manchester United, EA’s game will. And, again, which one will players go for? The World Cup content is not why the FIFA games are popular, let me tell you.
So from EA’s perspective, it makes total sense to go it alone. According to NYT, they have even trademarked a possible name, “EA Sports F.C.”, which sounds absolutely terrible, but, again, that name is irrelevant – to most players, this will be the FIFA game, whether or not it bears the FIFA branding. One very large part of that is the equity of Ultimate Team – see, Ultimate Team actually creates numerous benefits for EA, other than the billion dollars not brings in for the company ever year. It has created a “sticky” ecosystem for users, who are locked in – if you have spent all that time and money in Ultimate Team over the years, you’re not going to abandon that and go start from scratch in an entirely new game (especially if that new game might not even have official player and club likenesses, which is the whole draw of Ultimate Team). And, almost as importantly, Ultimate Team is a brand unto itself now (to the extent that EA should have leveraged it “Football Ultimate Team 2023 or FUT 23″, it writes itself, come on guys).
Of course, EA might see some loss of players in the year immediately following the loss of the FIFA name – but it will be minimal, whatever it is, particularly since, as discussed, FIFA is unlikely to have a competing product ready to go on time to begin with to muddy the waters (and because social media plus Ultimate Team plus lack of official licensing for players and teams would all contribute to EA’s game getting cachet with the average player base anyway). Whatever these losses they might suffer are – and as I said, they would be minimal, if that – it will take them at most a year to recover.
So EA is likely to proceed on its decided path. FIFA, the body, doesn’t have much recourse if that happens. EA comes out as the “winner”. Of course, ultimately, rooting for either of these two organizations is a fool’s errand – these are billionaires arguing over billions they make off of us and that we never get to see. But at least as far as we look at the situation within that context, and try to academically assess it for what it is, EA is better positioned to come out ahead from this fallout, whenever it happens. At this point, it feels like it’s a matter of time.
Note: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, GamingBolt as an organization.
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