Football’s new rivalry

LONDON (AP) – For three decades, FIFA enjoyed a flourishing, mutually beneficial relationship with Electronic Arts (EA) Sports. The annual edition of the video game, alongside related products, raked in billions of dollars and has proven to be so lucrative that FIFA thinks it can be making even more on its own.

FIFA severed the licensing deal partnership with Electronic Arts Inc recently, making FIFA23 the last new EA game with the involvement of both sides. They are now becoming opponents.

EA will continue to make football games with best players and biggest teams, they will just be stripped of the FIFA brand and instead called EA Sports FC. Confusingly, perhaps, FIFA24 should also be on the shelves next year because the football body is determined to go ahead with its own launch.

EA has already begun to highlight its advantages over the FIFA game, given it has the rights to show 19,000 players from over 700 teams in over 30 leagues playing in 100 stadiums.

Manchester United, Barcelona and Paris Saint-Germain will still be there, along with their best players.

“That is the only place that you can have an authentic, famous and fully representative football experience,” vice president of brand for EA Sports FIFA David Jackson told The Associated Press. “I do think that there is an element of potential confusion in  the marketplace.”

The hyperbole from FIFA is already trying to undercut EA’s marketing by claiming it is in talks with multiple rival gaming companies and has plans to enter the metaverse.

Gamers at Gamescom in Cologne, Germany. PHOTO: AP

“I can assure you,” FIFA President Gianni Infantino said, “that the only authentic, real game that has the FIFA name will be the best one available for gamers and football fans.”

How that will be achieved is far from clear, although FIFA does hold the rights to the biggest football show on earth. The World Cup will disappear from the EA game.

“The FIFA name is the only global, original title,” Infantino said. “FIFA23, FIFA24, FIFA25 and FIFA26, and so on – the constant is the FIFA name and it will remain forever and remain the best.”

That kind of bombastic talk puts pressure on FIFA to deliver on Infantino’s vision for a game that usurps the EA franchise despite not having the rights to feature leagues such as the Premier League – and the teams that play in them.

“New entrants would face a steep licensing curve to compete with EA,” analyst covering the digital media sector at investment bank Raymond James Andrew Marok said.

Football gaming is big business for EA.

The annual report issued this week showed revenue of USD6.19 billion.

“We’ve just had our biggest year – ever – for EA Sports FIFA games,” EA Sports CEO Andrew Wilson told investors on Wednesday, a day after it was announced the FIFA deal would cease at the end of the year.

A huge part of the revenue comes from the Ultimate Team mode, where customers buy extra content in EA sports games. That generated USD1.623 billion in 2021.

“We have historically derived a significant portion of our net revenue from sales related to our largest and most popular game, FIFA, annualised versions of which are consistently one of the best-selling games in the marketplace,” EA told investors.

Brand loyalty will be key starting next year. Will gamers stay with EA’s rebranded product or jump to the rival being launched by FIFA?

It’s already a competitive market with eFootball, the former Pro Evolution Football game produced by Japanese firm Konami. That game has a partnership with Manchester United, though the record 20-time English champions will still feature in EA’s game through a Premier League agreement.

EA has already warned its investors of the risks to its football gaming business from rivals.

“Any events or circumstances that negatively impact our FIFA franchise, such as product or service quality, other products that take a portion of consumer spending and time, the delay or cancellation of a product or service launch, increased competition for key licences, or real or perceived security risks, could negatively impact our financial results to a disproportionate extent,” EA said in its annual report.

EA should get an edge over FIFA by retaining its 300 licence partners, 30 leagues and federations, 700 teams and 19,000 athletes, JPMorgan analyst David Karnovsky said in a
client note.

“While it’s difficult to think there won’t be at least some impact from the brand shift to sales, the USD150 million available from the absence of a license fee to FIFA provides ample room for marketing to drive awareness around EA Sports FC,” Karnovsky wrote.

Untangling itself from the world of football politics has its benefits for EA. Tensions between regional confederations have led to European body UEFA and South American counterpart CONMEBOL circumventing FIFA to launch their own meeting of champions. The debut of the Finalissima will see Italy and Argentina meet at Wembley Stadium in London on June 1. It would seem incongruous for EA to promote its FIFA game at the match.

“What name would we put on a perimeter board in a UEFA-CONMEBOL event? It’s really tough for us to put FIFA on there,” Jackson said.

“What has previously been a springboard for our brand, and an accelerant to it many years ago, has just become less valuable to us over time.”

EA might just have saved the FIFA brand as well. The fond association with the video game by so many fans has balanced against the toxicity of Sepp Blatter-era organisation after the opening of sprawling criminal investigations into football corruption in 2015.

“If you ask a young football fan what FIFA is, they’re more likely to say a video game than they are the global governing body, but that value lives with us, I believe,” Jackson said. “We are the predominant voice in the world of football from an interactive entertainment perspective, and we don’t see a world where that changes.”