FIFA and EA Sports End Their Two-Decade Partnership

Nearly three decades later, one of the most successful business relationships in sports has come to an end.

Months of tense negotiations between video-game maker Electronic Arts and FIFA, the global governing body of soccer, ended without an agreement to extend the partnership, which did not make the game as popular as a cultural event.

The current deal, which was due to expire after the World Cup in Qatar this year, has been adjusted to run until the Women’s World Cup next summer. Once that tournament is over, the company said, 150 million FIFA video game players will have to get used to the 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 still be eligible to play due to separate licensing deals with their teams and leagues, even though the World Cup itself and other FIFA-controlled events will no longer be included. However, continuing the game does not change the seismic nature of the rebranding.

For millions of people around the world, FIFA characters do not represent real soccer but instead are a one-word shorthand for a video-game series that has evolved to provide a background in the lives of players as diverse as Premier League fans and casual fans. Players who had nothing to do with the sport also knew its stars and its teams through their digital doppelgangers.

That widespread use has created an exciting partnership for both EA Sports and FIFA: the game has sold over $ 20 billion in the last two decades.

But this text has been on the wall for months. While the controversy was undoubtedly rooted in different financial expectations – FIFA was demanding at least double the મેળ 150 million it receives annually from its largest business partner EA Sports – it also quickly became clear that there were different expectations of what should be included. New covenant.

The most recent deal was signed 10 years ago, but the intervening years have been marked not only by great technological changes but also by arguably more upheaval in FIFA, which almost collapsed in 2015 after a major corruption scandal. FIFA’s new leader, Ginny Infantino, tried to unlock new revenue streams – and often failed.

When even direct talks between Electronic Arts chief executive Infantino and Andrew Wilson failed to produce any success, the parties agreed to a cordial separation, Wilson said.

“It was really about how we can do more for the players, more for the fans, how we can give them more methods to play, how we can bring more partners into the game, how we can expand beyond the boundaries of the traditional game. Wilson, whose personal involvement as a sports engineer dates back to two decades ago, said in a telephone interview.

According to people familiar with the negotiations, in addition to doubling its licensing fees, FIFA also demanded the ability to link its brand with other digital products, including video games. That proved to be a far cry from EA Sports, which now has to persuade a legacy of dedicated fans to get used to the second name.

For FIFA, now is the time to explore new opportunities. But copying EA’s game will not be easy.

“If you’ve been in a relationship for more than 20 years, the consequences will come,” said Gareth Sutcliffe, a senior analyst specializing in the video games sector at Anders Analysis. “EA Motor will continue: they are all technically smart, creative implementation of the most spectacular football game – and that’s really awesome. But what does FIFA have? His name. And then what?”

As part of EA Sports’ calculations to separate FIFA from the sport that has its name for a generation, EA Sports has to face any challenge to test EA’s dominance in the market. Thanks to more than 300 similar licensing agreements with organizations such as the Champions League and UEFA, which governs local leagues and competitions around the world, its position in the soccer gaming industry has come under almost complete control.

Those deals allow EA to use not only player names and similarities in its game but also world-renowned clubs and leading leagues and competitions. The company was quick to flex its connections on Tuesday; Moments after the company announced a change of direction, some This Of the world The largest Teams – and some The smallest – Explained that they are supporting EA Sports on FIFA.

As FIFA seeks out new partners, many of those licenses will limit what they can do. For example, the two largest club competitions in the world – the English Premier League and the European Champions Soccer Champions League – will be available only to EA Sports FC players.

“EA Sports is a long-term and valuable partner of the Premier League, and we look forward to continuing to work together in a new era,” said Richard Masters, the Premier League’s chief executive. The statement also includes comments from officials representing the governing bodies of Europe and South America, as well as the heads of the German and Spanish leagues.

Deposit …Nick Adams / Reuters

The statement also includes a comment, perhaps pointing to potential business opportunities. NikeUnder its current agreement with FIFA, EA Sports is limited in commercial activities due to FIFA’s sensitivity to the slate of its trading partners. Now free of those restrictions, Wills clarified that EA Sports will partner with more companies and brands, creating the possibility of direct customer-to-customer sales of Team Jersey and other products.

The commercial success of the FIFA game is largely based on EA’s ability to take advantage of the soccer season; Often the company has made little more than cosmetic changes to its offerings – for example, a well-known player in the jersey of its new team, or a club promoted from the lower division – while introducing it as a brand new product on an annual basis.

“If it’s not. 1, it’s definitely one of the top three game franchises of all time,” said gaming analyst Sutcliffe. “And the reason is that there are a lot of releases. Every year they change the number on the box, put a new player in front and it is almost identical under the hood.

Part of the negotiation between FIFA and EA Sports is based on the evolution of how the digital world is changing. New products and games such as Fortnite and Roblox are seen as digital world, just like games, which FIFA is keen to tap into other products by licensing its name.

EA Sports has told FIFA that it is not ready to share a name that has become globally popular in the video game market.

“I’m going to say, ‘Wait a second: we’ve literally spent millions of dollars making this and you’re telling me that Epic Games could come and get the license we created and we have it.’ Put it in front and in the middle and it has become synonymous with sports? “Peter Moore, former head of EA’s sports division, told The New York Times when the news first came out that EA and FIFA could be part of the company.

EA’s financial strategy for FIFA has also evolved over the years, with innovations such as player packs like trading cards increasing profitability, forcing users to spend money on the game as they seek to create better rosters. An analytics company estimates that the in-game feature, known as the Ultimate Team, was worth $ 1.2 billion for EA Sports last year.

For FIFA, the break with EA Sports, and the loss of its nine-figure licensing payments, represents a risk for Infantino, who announced last month that he would run for a third term as president and has promised 211 ever the biggest handouts. Soccer Federation that votes in elections. The complexities of FIFA’s commerce department have also been discussed. That help, was hired last summer with much fanfare, Departed Less than a year into the post last month, Infantino became the third commercial head to step down since being elected president in 2016.

FIFA’s focus right now is on the Qatar World Cup. The same is true of EA Sports, with Wills promising FIFA’s latest release – the game – to be the biggest ever in September. He also said he hoped it would not be the last World Cup in a sport produced by EA Sports, offering the Olive Branch, insisting a separate deal could be struck with FIFA.

“We would love to continue to be represented in the World Cup through the game,” he said.

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