Mexico City- After nearly three decades, one of the most successful business relationships in the sport has ended.
Months of tense negotiations between video game maker Electronic Arts (EA) and the International Federation of Association Football (FIFA) ended without an agreement to extend an alliance that had created both a wildly popular game and a cultural phenomenon.
The current deal, which was due to end after this year’s World Cup in Qatar, has been adjusted to run until next summer’s Women’s World Cup. But once that tournament is over, company officials confirmed, 150 million FIFA video game players will have to get used to a new name for the series: EA Sports FC.
The game itself will not change much. Most of the world’s famous clubs and stars will continue to be eligible due to separate licensing agreements with their teams and leagues, although the World Cup itself and other FIFA-controlled events will no longer be included.
To millions of people around the world, the letters FIFA do not represent actual football, but rather a one-word abbreviation for a video game series that grew to provide the backdrop to the lives of players as diverse as the Premier League pros. League and casual fans. Even players with no other connection to the sport got to know their stars and their teams through their digital doubles.
That kind of wide use created a lucrative partnership for both EA Sports and FIFA: the game has generated more than $20 billion in sales over the past two decades.
While the snag in the negotiations was partly due to differing financial expectations (FIFA was seeking at least double the $150 million it receives annually from EA Sports, its largest business partner), it also quickly became clear that there had been different expectations about what should be included in a new agreement.
The most recent pact was signed 10 years ago, but the intervening years were marked not only by major technological change, but possibly even greater turmoil at FIFA, which nearly collapsed after a major corruption scandal in 2015. The new Federation leader Gianni Infantino has tried, and often failed, to unlock new sources of revenue.
When even direct talks between Infantino and Andrew Wilson, the CEO of Electronic Arts, failed to make a breakthrough, the parties agreed to an amicable separation, according to the latter.
“It was really about how can we do more for the players, more for the fans, how can we give them more ways to play, how can we bring more partners into the game, how can we expand beyond the boundaries of traditional gaming,” he said in a statement. phone interview Wilson, whose personal association as a game engineer dates back two decades.
In addition to doubling its license fee, FIFA has also required the ability to link its brand to other digital products, including other video games, according to people familiar with the talks. That turned out to be a step too far for EA Sports, which must now persuade legions of devoted fans to get used to another name.
For FIFA, there is now an opportunity to look for new opportunities. But replicating EA’s game won’t be easy.
“If you’re breaking up a relationship that goes back more than 20 years, there are going to be consequences,” said Gareth Sutcliffe, senior video game industry analyst at Enders Analysis.
“EA will keep moving forward: they have all the technological intelligence, the creative implementation of an absolutely fantastic football game, and it really is fantastic. But what does FIFA have? Its name.”
EA’s position in the video game market has grown to almost total control over the football game industry thanks to more than 300 similar licensing deals with organizations such as UEFA, which administers the Champions League, and leagues. and national competitions around the world. Those agreements allow EA to use the names and likenesses of not only players, but also world-famous clubs and prominent leagues and competitions in its game.
As FIFA looks for a new partner, many of those licenses will limit what it can do. For example, the two biggest club competitions in the world, the English Premier League and the Champions League of European football’s elite, will be available only to EA Sports FC players.
“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 era,” Richard Masters, chief executive of the Premier League, said in EA’s statement announcing its break with FIFA.
The statement also included comments from officials representing the governing bodies of Europe and South America, as well as the heads of the German and Spanish leagues.
Perhaps pointing to potential business opportunities, the statement also includes a comment from Nike. Under its current agreement with FIFA, EA Sports has been limited in its commercial activities due to the sensitivity of soccer’s world governing body to its list of commercial partners. Now free of that restriction, Wilson made it clear that EA Sports will be looking to partner with more companies and brands, creating the potential for direct-to-consumer sales of team jerseys and other merchandise.
The commercial success of the FIFA game has been largely based on EA’s ability to take advantage of soccer’s seasonality; often the company has made little more than cosmetic changes to its offering (a well-known player in his new team’s jersey, for example, or a club promoted from a lower division), while presenting it as an entirely new product each year. .
“If it’s not No. 1, it’s certainly in the top three game franchises of all time,” said Sutcliffe, a game analyst.
“And the reason for that is there are so many releases. Every year they change the number on the box, put a new player on the front, and it’s pretty much the same under the hood.”
Negotiations between EA Sports and FIFA also failed amid the evolution of the digital world. Newer products and games such as Fortnite and Roblox are considered both games and digital worlds, something FIFA has wanted to take advantage of by licensing its name on other products.
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