EA Sports FC sheds FIFA name (and a $300m bill to use it): Video Games Industry Memo, 28/09/2023
Newly branded version of EA's football mega-hit demonstrates the true power of games today
EA Sport FC’s decision to ditch the FIFA name pays off
Microsoft’s acquisition of Activision Blizzard gets UK provisional clearance
Cyberpunk 2077 DLC offers main alternative to new football games
The big read - EA Sports FC leaves behind its FIFA legacy
Every September, the majority of the video games industry takes a Friday off from releasing games to allow Electronic Arts (EA) to put out the latest version of its mega-selling annual football simulation franchise.
But for the first time in three decades, we won’t be calling that game FIFA. Instead, the first ever EA Sports FC game (FC) is hitting the market after the publisher balked at the governing body’s attempts to charge over $300m to slap its name on the box.
Importantly, there appears to be a clear winner from the schism: EA. It is on course for another smash hit sports release, while FIFA - according to VGIM sources - is shopping around desperately for an agency to make branded user-generated content experiences to replace its lost title.
But why has the split played out so decisively in EA’s favour? The answer is that the balance of power between the two companies shifted decisively towards the publisher - handing EA the confidence to step away from FIFA and make its own way forward.
A little and large partnership
To understand why power dynamics matter here, we need to roll all the way back to the start of the franchise which, frankly, would not have been likely to survive if it had not received the FIFA license.
As told in Simon Parkin’s excellent 2016 jaunt through the history of the game, EA’s first soccer game was unloved, unappreciated and at risk of cancellation by its American leadership team who did not see the value of it to the wider business.
The canny decision by EA’s European marketing team to secure the FIFA license, however, changed the prospect of the series. Even though the licensing deal was undercooked by modern standards - to the point that the lead developers named the best players in the games after themselves (Jan Tian meet Janco Tianno) - it afforded EA’s game a level of credibility that rivals like Sensible Soccer didn’t have.
Upon its release in 1993, FIFA International Soccer became a surprise global best-seller. Its success led to the decision to turn the series into an annual franchise, transforming the game from a one off release into an annual cash-cow.
And over the course of three decades, the FIFA series dominated the space. Its focus on authentically recreating the experience of watching football (underpinned by licenses, brand partnerships and ever higher production values) helped it to muscle scrappier rivals out of the market in the 1990s and shove aside major rivals such as Konami in the 2000s - becoming the dominant player in the market.
A marriage of incovenience
But while the series continued to generate year-to-year value to each company, it remained rooted in an historic exchange of value: FIFA’s brand for EA’s development expertise.
By the time the 2010s rolled around, however, the exchange between the two was becoming increasingly one-sided. Although the FIFA name remained at the tip of player’s tongues, the balance of power tipped decisively in EA’s favour because the expansion of both the company and the franchise gave it full control over the game and its surrounding eco-system.
EA had obviously created and evolved the engine that made the game function. But it had also expanded its range of licenses and partnerships well beyond the borders of FIFA to produce an authentically ‘broadcast ready’ football experience for club teams across the world. It built its brand and marketing capabilities to help embed its game - and its position as its publisher - in the minds of millions of players and as an integral part of the football community. It also, crucially, held all the power in regards to revenues in part through sales of the game but increasingly through its ubiquitous, yet controversially loot box filled, Ultimate Team mode.
In contrast to EA’s growing authority, FIFA squandered what power it had by diminishing its brand value through mismanagement and venality. Its initial expansion of its commercial value in the late 1990s and the early 2000s under the leadership of Sepp Blatter rapidly descended into laughably mafioso levels of corruption.
This reached its peak through its decision to award a summer World Cup to Qatar in 2022 which, as Heidi Blake and Jonathan Calvert’s insightful book The Ugly Game shows, was made off the back of systemic corruption and bribery of officials. This led in turn to the defenestration of Blatter, the arrest of multiple officials and the shaming of the governing body.
In this context, FIFA’s value as a brand declined precipitously as EA’s power in the relationship soared. As a result, its request in the early 2020s for a doubling of its licensing fee wasn’t sensible commercial decision making; it was an irrational cash-grab from a position of weakness - allowing EA to “do a Football Manager” by severing and go its own way.
Powerplay
So, what can we learn from this? I’d say that the wrong lesson to learn from this is that external partners hold no power compared to games businesses.
EA still understands the value of the right brands, retaining swathes of licenses to leagues, painstakingly recreating player and stadium likenesses and even continuing its long-term partnerships with musicians in the FC series. And while our sources indicate it is in course to sell as comfortably as it has done in years gone by, there is still a chance that FC doesn’t sell as well without the FIFA name.
So for now, I think we’re better off drawing a different conclusion: external businesses do still hold value for games companies but the power dynamic has shifted against them.
Games have come such a long way since their early days in the 1980s. The emergence of an enormous global games economy, driven by major platforms, titanic games as a service offerings and increasingly securely funded smaller businesses has helped the industry establish comfort with its power.
In this context, brands, businesses and organisations wanting to work with games need to adjust their strategies to account for this reality.
With games businesses able to dictate terms as a result of owning the IP, the creation process, their economies and the all-important relationship with players, external businesses must work considerately, constructively and without complacency with games companies to benefit from partnering with the sector.
Otherwise they risk being left out in the cold - and out of pocket - like a particular football governing body is today.
News in brief
Koticking the box: The CMA has provisionally cleared Microsoft’s restructured deal to buy Activision Blizzard. While the regulator has spun this as a clear win for them, HM Treasury’s decision to release a photo of Bobby Kotick’s grinning ear-to-ear roundtable with the Chancellor just four hours after the news was announced suggests otherwise.
Ubi-thoughty: Speaking of companies happy with the CMA’s decision, Ubisoft’s Yve Guillemot sat down with The FT to share his optimism about cloud gaming. Given that they’ve reportedly received at least a nine - if not ten - figure sum of cash to help break the deal logjam, I understand why he’s feeling positive about it.
Unity climbdown continues: Unity has announced a hefty restructuring of its runtime fee proposal, dropping it for Personal Plans, increasing the cap for qualification, allowing developers to pay a rev share and promising it only applies to future projects. Developers remain unconvinced.
Strike Forced?: SAG-AFTRA has voted overwhelmingly in favour of strike action for video game actors and performers working with companies such as Activision, EA and Epic Games. Further bargaining sessions are planned to avert a strike, with grievances focused on pay and the impact of AI on performers.
Let’s (not) Play: We wrote about China limiting play-time of video games last month but how does that marry up to its attitude to esports? This piece from Bloomberg about China’s uncertain relationship with competitive play, balancing its desire to promote competitiveness amongst young people with its mistrust of games.
Ins and outs
Jim Ryan is retiring. The PlayStation head honcho announced late last night that he’ll be calling time on his career in March next year…Hideki Kamiya is leaving Platinum Games but has not yet clarified whether he’ll still block you on X if you ask him stupid questions…Christianna Barnhart has been appointed SVP of Government Affairs at US trade association ESA…Red Bull is looking for a Gaming Manager in Dallas.
Events and conferences
Melbourne International Games Week, Melbourne - 30th September - 8th October
EGX, London - October 12th - October 15th
GamesAid Gala Dinner, London - October 19th
Scottish Games Week, Multiple locations - 30th October - 3rd November
Paris Games Week, Paris - 1st November - 5th November
Games to watch this week
Cyberpunk 2077: Phantom Legacy - Well-received DLC for first person RPG continues its No Man’s Sky-esque redemption arc.
Overpass 2 - Shiny looking dirt racing sequel heads for the grid.
El Paso, Elsewhere - Neo-noir supernatural shooter gets thumbs up from critical community.
Tangle Tower - Ace murder mystery from Snipperclips devs pops up on mobile devices.
Before you go…
Baldur’s Gate 3 has been patched to make it easier to remove its optional in-game clown make up, after players reported it was inadvertently ruining key moments - including major story moments and sex scenes.
To poorly paraphrase The Kinks: let’s all drink to the petit morts of those clowns.