Sunday, October 17, 2021

Dispute over football game escalates The billion dollar game between Fifa and EA Sports

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For days it has been publicly debated whether EA Sports could rename its hugely popular “Fifa” football game series. Now it becomes clear why: Fifa is apparently demanding over a billion dollars in license fees.

The Fifa game series is one of the most successful sports game simulations ever. Since the start almost thirty years ago, the game publisher EA Sports has now made over 20 billion US dollars with the annual series.

Not insignificant for the success is certainly that EA Sports has secured the usage rights for all relevant brand, club and player names – so that fans can actually play with their club and their stars. Many digital characters are now confusingly similar to their human role models.

Perhaps one of the most important licenses is that of the world football association Fifa. It enables the game to have its name in the title – and that the soccer world championship can also be digitally reproduced.

But in the coming year, the current agreement between EA Sports and Fifa will expire after ten years. According to a report in the “New York Times”, both parties have been sitting at the negotiating table for two years to regulate the framework for use in the coming years. But apparently no agreement has been reached so far.

Much is at stake for both parties. The use of FIFA rights is said to have recently cost EA around 150 million US dollars a year. For Fifa, this is by far the largest advertising agreement with a single company.

The “New York Times” now claims to have learned from several sources that the negotiations have come to a standstill. This is also indicated by the statement made by EA Sports boss Cam Weber last week. He said that they were thinking about renaming the soccer game series.

The reason for this step, with which the game publisher is undoubtedly building up pressure, could be the considerably increased demands of Fifa. According to the report, she wants more than double the previous amount for the coming years. This would add up the price for a World Cup cycle, i.e. four years, to over a billion dollars. A price that EA Sports is obviously unwilling to pay.

According to the “New York Times”, however, they are arguing on another point: Fifa wants to limit the usage rights of the name very closely to the football game itself, EA Sports, on the other hand, would also be allowed to use the name for other companies in connection with the video game, for arena tournaments or digital products such as NFTs.

Since the Fifa license does not refer to club and player names or other tournaments such as the European Championship, a failure of the negotiations for EA Sports would at least not be a catastrophe. The fact that there would be no World Cup edition would certainly be bearable in view of the license sum saved.

In addition, new in-game purchase options such as “Ultimate Team” are said to have proven to be very profitable for the makers: Piers Harding-Rolls, an analyst at Ampere Analysis who specializes in the game industry, estimates that EA Sports is also contributing to the “New York Times” “Ultimate Team” earned around $ 1.2 billion last year alone.

It also seems very unlikely that a competitor could secure the naming rights and seriously compete with the game series. Fifa has been extremely dominant for years, Konami’s only significant competitor, “Pro Evolution Soccer” (PES), has never been able to win nearly as many fans and has just failed spectacularly with a restart and renaming of its own PES series.

An exit from the Fifa deal is therefore quite conceivable for EA Sports – whether it will actually come to that is anything but clear so far.

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