Why EA Killed FIFA

This is the most popular sports  video game in history. In total, FIFA has sold more copies than  its two nearest rivals combined. When you think about football, you think  about the games you see on TV.

But actually, people spend far more time playing  online than watching real football. On any given Sunday, 200 million games  of FIFA are played across the world. That’s a lot of time.

And means a  lot of business. Especially for those two. Electronic Arts.

One of the largest  video gaming companies in the world. Who made approx 20 billion dollars just with  the FIFA game over the last two decades. And FIFA.

The governing body of football,  one of the most powerful sports entities in the world - who made 150 million dollars per  year just for being the namesake of the game. It sounds perfect. Fans are united in their love  for the game.

EA and FIFA make billions in return. Until EA decided to kill the FIFA  series. Which is why the latest version looks like this.

FIFA -  the game - is officially dead. But why change the name of your most successful  product? Especially when the new name is far less catchy.

That would be like re-naming  Twitter after a random letter in the alphabet… More importantly, the FIFA name is  now up for grabs. There is nothing stopping a rival from snapping up the  license and releasing their own FIFA 24. At first sight, it looks like EA made a  horrible mistake.

But on closer inspection, it may have pulled off one of the best  business decisions in recent history. Welcome to Athletic Interest, this  is the story of how EA killed FIFA. The history of EA’s FIFA begins  with a huge ‘what if’ moment.

The original name for the game  was Team USA Soccer. Luckily, EA changed it to FIFA after making a licensing  deal with football’s governing body in 1993. Although the bosses at EA were never fully  convinced that football could translate properly into a video game.

They gave the project to a  small team in London with an equally small budget. The team worked 16-hour shifts to bring the  game to life. One developer was hospitalized with exhaustion.

His child even called the  head of EA to ask if his dad could come home. The original game was nothing like modern FIFA. 2D players with no distinguishable  features.

Fake names. Fake stadiums. It did, however, have no competitors and  four big letters on the front of the box.

Within four weeks of its launch, FIFA International Soccer was the  best-selling game of the year. The developers argue that this was because  the game was unique. FIFA thinks its name gave the game authenticity.

An argument  that will become relevant later again. EA’s success spawned competitors.  The most notable being Goal Storm.

Which would later become Pro Evolution Soccer. The early 2000s was dominated by an  arms race between these two titles. FIFA became known for its fun gameplay. 

PES was more tactical and tough to master. For many, PES was the better  game. In a different world, it would have been the topic of this video.

But  a fundamental shift happened in the mid-2000s. As graphics improved, gamers started to look for  the most realistic experience. For football fans, this meant playing with your favourite player in  your favourite team in your favourite stadium.

While one had spent time  mastering the game engine, the other had closed licensing deals for  every major league, team and player. In one game you could play with Manchester  United and in the other it was Man Red. These licensing agreements created a huge  competitive advantage for EA.

Here’s why. If you want to create your own football  video game, you cannot simply use the logos of the clubs and the names of the  players. They need to give you permission first.

And usually, this permission  - or license - costs a lot of money. Not only did EA make these agreements with  practically every league, club and player, some deals were exclusive. So PES and  any other competitor were unable to copy.

And had to come up with the most  ridiculous fake names for their games. Bayern was simply called ‘Rekordmeister’. Real Madrid was MD White.

And Ajax ‘Museumplein’ - after  a famous place in Amsterdam. Don’t forget legendary players  like Naldarinho and Roberto Larcos. EA’s advantage became even clearer with  the launch of Ultimate Team.

They began to sell virtual player cards - a bit  like virtual Panini stickers - that unlocked those players in the game. This  has become one of the most addictive aspects of FIFA. And contributes  to almost 50% of the game’s income.

PES was slow to replicate this. Even then, who wants to buy virtual cards  of fake players and teams? As FIFA grew, PES slowly died. 

FIFA 15 reached 18 million sales, PES 15 couldn’t even hit 10% of that. So you could argue that FIFA’s success is all down to authenticity. And a big  part of that was the name.

But then why break-up? EA’s first naming-rights deal with FIFA was reportedly very cheap.  But times have changed.

FIFA operates the biggest team sports event in the world  and manages huge commercial contracts. FIFA has re-negotiated its agreement several times. EA was paying 150 million  dollars per year before the split.

Each time EA paid because it understood  the value of those four letters on the front. It added authenticity. EA has long  claimed it wants to put all of football inside the game.

Adding the official  badge of football is a key component. Also important: brand continuity. FIFA  was a clear brand name.

It is part of gamer vocabulary. Parents knew what  to look for in the shops at Christmas. So FIFA saw dollar signs.

And decided to  ask EA for double the previous amount. FIFA assumed that EA would  want to keep the brand name at all costs. But this strategy backfired badly.

There had long been rumours that EA was  considering a split. Because they felt limited by the agreement. EA wanted to introduce new features  to the game, but FIFA often pushed back because they wanted to protect their brand.

EA was keen  to explore Web3 and Esports, FIFA…not so much. And what kind of Athletic  Interest video would this be without Nike and Adidas playing their part? !

EA had long wanted to partner with Nike but  was blocked because FIFA had an exclusive deal with Adidas. Signing with Nike was one  of the first things EA did after the split. FIFA pushed and EA jumped.

A risky move. Gianni Infantino was quick to promise to  continue the FIFA series with another developer. A declaration of war to EA.

Suddenly, you had a battle of the giants: the world’s most influential sports  organization vs a huge American tech company. And FIFA looked like the favorite. They are a  powerful enemy - Netflix made full documentaries about that.

They control the most popular sport  in the world, make billions of dollars with that sport and their bosses regularly meet  with the world’s most influential leaders. But while FIFA was obsessed  with the value of its own name, it forgot where the true value of  the video game lies. The realism.

In EA’s agreement with FIFA it didn’t actually get  much more than the four letters on the front. The right to use player likenesses, team names, badges  and leagues all came from separately agreed deals. And this is where EA hit FIFA hard.

EA has an army of lawyers that  work with individual leagues, clubs, agents and player unions  to lock down these agreements. Often players don’t even realise that  they have agreed to be included in the game. Zlatan Ibrahimovich once  tweeted that he never consented to be in FIFA.

EA was quick to remind him  to look into his contract with AC Milan which includes a clause allowing the  club to sign away his image rights. Any player or team that joins  the Premier League automatically signs away its rights to be included in EA games. EA has built a complex web of licenses  that would be incredibly expensive for someone else to replicate.

In some  cases, these agreements are exclusive. Even when PES was able to make agreements with  the Premier League and the Bundesliga, exclusivity meant that only a few teams from each league were  included in the game. The rest were still fakes.

That’s exactly why EA isn’t scared if someone else picks up the FIFA name. They won’t have  any licenses for what truly matters. EA’s web of licenses also attracts new partners  and traps the current ones inside.

In economics, this is called the network effect. The more  users join the same network, the more value the product has for each user. And the less sense  it makes for a single user to leave the network.

Clubs and leagues bundle their gaming  rights into one package and sell the entire thing exclusively to EA. This ensures  that they get the maximum amount possible. And by now there is another thing.

They also  want to ensure that they continue to appear in the EA game because it's the most popular.  This guarantees exposure for them and their sponsors to hundreds of millions of people  across the globe. Remember, people spend more minutes playing virtual football looking at  the virtual kits than they watch the real ones.

EA probably wouldn’t have the biggest  sports game on the planet without the FIFA name. It added authenticity at  a time when the game had no fanbase. But EA has outgrown FIFA.

While EA Sports FC will probably never be as  catchy, it doesn’t need to be. The licenses are what create the  authenticity that fans crave. Players, clubs and leagues give themselves to EA because  they also need the exposure.

This creates a virtuous cycle where the two sides come to  depend on each other for mutual benefit. FIFA may have a brand name  that it considers to be worth 300 million dollars, but without those  licenses it's worth practically nothing. That’s probably why Infantino has revised  his promise of a FIFA 24 to a FIFA 25.

A change of one number, but the sign that  FIFA may be regretting its split from EA. So what do you think? FIFA  is dead or long live FIFA?