Once again, licenses are at the forefront of the virtual soccer discussion, but this time the ramifications could be significant. If you’re unaware, the licensing agreement between EA Sports and the FIFA organization recently expired. Instead of renewing it as EA has done in the past, they seem to have taken a more cautious approach to see if it’s even worth renewing it, especially since the rumored cost to renew is now beyond the old price of $150 million/year. That amount of money, even for a company as massive and a game as popular as FIFA, is nothing to sneeze at. While EA has and will certainly be able to afford this fee in the future, is it really worth it?
On the FIFA side of things, that organization did not seem entirely comfortable with all the directions EA might take the license, and it seemed to be using that as leverage for why the price should remain high. On top of that, FIFA believes more companies being involved means it would ultimately come out on top from a money perspective.
So both mega entities have their positions, so let’s chat now about the outcomes.
What’s In A Name?
If you mention the name FIFA, I’d wager that most folks will think you’re referring to EA’s popular soccer video game and not the organization that’s most famous for the World Cup. The most popular sports franchise in the world, FIFA is a game transcends all others, rightly or wrongly, with its popular modes that include the controversial FIFA Ultimate Team (FUT). Inside of the game, FIFA is a complex mash-up of smaller licenses that allow gamers to compete with real players in some of their favorite leagues and tournaments.
With these licenses come partnerships which work both ways, benefiting both EA and FIFA by introducing fans to the game and sport at an early age. This keeps players engaged, even when the leagues or competitions aren’t in-season. Since 1993, EA has had this license, which has helped to grow its soccer franchise FIFA exponentially over the years. All this has come to light after EA’s GM Cam Weber stated the following:
“As we look ahead, we’re also exploring the idea of renaming our global EA Sports football games,” he said. “This means we’re reviewing our naming rights agreement with FIFA, which is separate from all our other official partnerships and licenses across the football world.”
EA has in the past released standalone World Cup games, some of them being really good (WC 2010 and 2014) and some of them less than stellar (WC 2018). Without the license, this product would go away. This would be a bummer for us footy gamers, but not deal breaking as it only comes out once every four years.
What’s The Cost?
EA’s previous deal with FIFA cost around $150 million a year to use the likenesses, branding, and everything else associated with the license. Earlier this week, the New York Times reported that EA’s 10-year agreement ends this year and FIFA is reportedly looking for something like $250 million a year for the next four years, which syncs up with the official World Cup cycle. There’s no concrete data on whether or not the deal was exclusive, but it wouldn’t be beyond EA’s reproach considering its affinity for licenses.
What’s The Benefit For FIFA?
In terms of FIFA, the organization, the main benefits are obviously the money, which FIFA likes very much (hello Qatar!) and exposure since “FIFA” is synonymous with the game now thanks to EA’s marketing endeavors over the years. If EA doesn’t renew the license, there are some other players in the market, as well as some like 2K that have one eye on breaking into the world’s most popular sport.
Since the exclusivity of the license is unknown, FIFA could have the ability to push this license towards multiple companies as a way to recoup some funds. How likely is this though with Konami in a state of self-induced flux while newcomers like UFL are still trying to get off the ground and might not be able to front the cash needed to secure this license?
What’s The Benefit For EA?
There are two sides of a coin to look at when it comes to extending this license. The first side is branding, and very few brands are stronger than EA’s signature franchise. No doubt marketing research firms are circling around EA with studies and focus groups to determine what’s the risk/reward for this license.
The other side of the coin centers around the $250 million that EA could pocket and throw towards a new marketing strategy. It’s a potentially dicey situation for EA. While the FIFA license does bring the World Cup, other licenses like FIFPRO, which was renewed recently, as well the English Premier League license would not be impacted. With over 300 individual licenses, can EA afford to lose the one on the box?
What Should EA Do?
With Ultimate Team raking in roughly $1.2 billion a year, EA can certainly afford the uptick in pricing by FIFA, but in my opinion, it’s not worth it for several reasons. First and foremost, the current offering within FIFA 22 is mostly nothing. With the omission of several national sides, including most if not all of Africa, the World Cup is already stripped down. To add to that, it’s only offered through career mode, which trails in popularity to Ultimate Team. Sure, there’s the FIFA Club World Cup that occurs every year, but that only includes a few clubs from around the world, and it is very select since you need to win a continental cup tournament (think UEFA Champions League) to participate.
Secondly, Konami rebranded its PES franchise to “eFootball” a few years ago and many hardly noticed because there was no change to the actual game. Despite everything surrounding eFootball 2022 being a mess at this juncture, the name, is the only thing that hasn’t received critical attention. If PES can rebrand, surely EA can do it and probably churn out a few commercials with whatever new name is on the box.
Lastly, there’s really no competition within footy games at the moment. Konami is on life support, UFL hasn’t shown any gameplay, and there’s no indication that 2K, who many would love to see enter the fray, has any real interest in making a footy game. Even if 2K became interested, it would be years before the game was ready to be released.
If I were EA, I’d call FIFA’s bluff and tell the company to shop around and see what kind of interest it receives. After all, FIFA’s no stranger to over-hyping itself. Plus, with talks of a World Cup every two years instead of four, the organization seems to operate based on greed and an overestimation of self-importance when it comes to the beautiful game. While there’s a potential for FIFA to really think outside of the box and partner with a company like Epic, the once-solid relationship between EA and FIFA seems to have been broken. Perhaps it’s posturing by both sides to secure better financial deals, but I wouldn’t be surprised if the next soccer title from EA is something along the lines of EA Sports FC.
