EA Sports Is Planning for a FIFA Without FIFA

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It is one of the longest and most successful relationships in sports. Almost three decades after the world’s football governing body ceded its name to a Californian video game maker looking to expand its offering, the FIFA series born out of this partnership has become less of a game than a cultural phenomenon.

For millions of people around the world, the letters FIFA now no longer represent actual football, but rather a shorthand in a nutshell for the hugely popular video game series that has become a staple in the lives of players as diverse as the pros. of the Premier League, casual fans and even players with no other connection to the sport.

Sales of the game, which releases an updated edition every year, topped $ 20 billion over the past two decades for its California maker, Electronic Arts. But FIFA also benefited: Its licensing deal became the organization’s most valuable business deal, worth around $ 150 million a year.

And now all that money is in danger.

At least two years of talks on renewing the contract that allows Electronic Arts, through its EA Sports division, to use the organization’s name have hit the mark, according to several people familiar with the negotiations. The possibility of a permanent hiatus after next year’s World Cup in Qatar – at the end of the current 10-year deal – was made explicit in a letter released last week by Cam Weber, executive chairman and Managing Director of EA Sports.

In it, Weber raised the unthinkable: FIFA without FIFA.

“As we look to the future,” Weber wrote, discussing the future of the series, “we are also exploring the idea of ​​renaming our global soccer games EA Sports.”

The heart of the dispute is financial. FIFA is seeking more than double what it currently receives from EA Sports, according to people familiar with the talks, a figure that would increase its series earnings to more than $ 1 billion for every World Cup cycle. four years.

The dispute isn’t just about the money, however. Talks are also stalled because FIFA and EA cannot agree on what the player’s exclusive rights should include.

FIFA would prefer to limit EA’s exclusivity to the narrow parameters surrounding use in a football match, most likely with the aim of seeking new sources of revenue for the rights it would retain. EA Sports, meanwhile, argues that the company should be allowed to explore other businesses within its FIFA video game ecosystem, including actual game highlights, arena video game tournaments and merchandise. digital like non-fungible tokens.

A decision is likely by the end of the year, but EA officials are already planning a post-FIFA future. Earlier this month, the company filed two trademarks, one in the European Union and the other in Great Britain, for the term EA Sports FC.

FIFA and EA Sports declined to comment publicly on the discussions. But the dispute has taken industry watchers by surprise, including Peter Moore, who held executive positions at Electronic Arts for a decade before leaving in 2017 to become general manager of Premier League team Liverpool. Moore is now a senior executive at Unity Technologies, a video game software company.

“I don’t remember them ever issuing a statement that we were in negotiations on a license renewal,” Moore said in a telephone interview. “It’s clearly sending a little signal. “

Part of EA’s math is that – even though it’s forced to rename one of the most popular video franchises of all time – it’s unlikely that a competitor can challenge its dominance of the market. EA’s position has grown to almost complete control over the soccer games industry through more than 300 other similar licensing deals with organizations like UEFA, which manages the Champions League, and national leagues and competitions around the world. These agreements allow EA to use the names and likenesses of top players, world-class club teams and leagues in its game. (On Tuesday EA renewed one of these agreements with FIFPro, the global union of actors.)

FIFA and EA Sports declined to comment publicly on the discussions. (To file)

Since its license with FIFA only grants EA Sports the use of the organization’s name and logo and the rights to the World Cup, a month-long championship that takes place every four years, the game creator appears to have concluded that losing the relationship wouldn’t be the kind of existential threat he might face if he loses the licenses to another hugely popular sports franchise, Madden NFL.

However, any rupture would have consequences. The FIFA franchise is hugely profitable, said Gareth Sutcliffe, senior video game analyst at Enders Analysis, as EA Sports are able to make little more than cosmetic changes to their game in most years and continue to do so. achieve millions of sales with the release. of each new edition.

For FIFA, a break with EA Sports and the loss of its nine-figure license payments could threaten some of the innovations proposed by FIFA President Gianni Infantino. For example, he seeks to raise up to $ 2 billion to finance a new enlarged World Cup for clubs. At the same time, he is trying to persuade members to support his plan to increase the frequency of the World Cup every two years.

To find this new revenue, FIFA officials investigated the possibility of selling licenses for video games and digital products that are not related to football. Partnering with another company like Epic Games, the maker of the hit franchise Fortnite, for example, would expand FIFA’s reach but dilute the exclusivity that EA pays a premium for. This, according to former gaming industry insiders like Moore, could be the reason his old company is considering moving away.

“I’m going to say, ‘Wait a second: we literally spent hundreds of millions of dollars to build this, and you’re telling me that Epic Games can come in and license the name that we built and put us on. front and center and which has become synonymous with games? ‘ Moore said. “So, yeah, I’m negotiating, and I’m fighting it.”

This article originally appeared in The New York Times.

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