For millions of soccer fans, “Fifa” refers not to the sport’s international governing body, but to their favourite video game.
The connection was formed 30 years ago, when California-based Electronic Arts licensed the name of Zurich-headquartered Fifa. The game is now played by 100 million people worldwide, has become a multibillion-dollar business and is a cultural phenomenon.
Despite the long and profitable association, the two sides are in a bitter dispute over the value of the Fifa name. “We are not certain that we will move forward with Fifa as a naming rights partner,” David Jackson, a senior executive who runs EA’s football brand, said.
Decision
Mr Jackson said “the name Fifa lives in the minds of many young players around the world”, but that it had “lots and lots of players . . . we don’t see a reason why that would change in the future”.
In preparation, the company has trademarked the name “EA Sports F.C.” across Europe and plans to make a final decision on what to call its football franchise by the end of the year.
The battle highlights growing tension as some within the sport seek a greater share from the game’s enormous success.
Mino Raiola, the super-agent who represents footballers including Zlatan Ibrahimovic and Paul Pogba, has said hundreds of players want to sue EA over the use of their identities within Fifa.
In recent years, Juventus has pulled out of the game, alongside other Italian clubs such as Roma and Lazio. EA said it had contractual rights to include the likeness of all players currently in its game.
Gareth Sutcliffe, from media analyst company Enders Analysis, said “the economics of the game are fantastic”. But he added there were only so many battles that EA could pick with football bodies.
“You don’t want to be in a position where all of a sudden you’re beginning to unpick [naming ]arrangements,” he said.
Console owners pay up to $70 (€62) to buy each new iteration of Fifa released every year, though there are also free-to-play mobile versions. At the end of September, it had 36 million unique “entitlements”, meaning people who have signed into Fifa 21, the version of the game released in October last year. This compares with 35.3 million at the end of September for Fifa 20.
EA said 27 per cent of Fifa 21 players have made “in-game” purchases, such as through “Ultimate Team”, where gamers spend money to improve their squads to compete against others online. Analysts suggest Ultimate Team is worth about $1.5bn a year for EA.
Increase
Fifa has tried to leverage this to demand a significant increase from the roughly $150 million it receives from EA each year, according to people familiar with the negotiations, after the video game company’s 10-year contract to use the name expires at the end of the men’s World Cup in Qatar in 2022.
The first sign of contention was an open letter released last month by Cam Weber, the executive president and general manager of EA Sports, which said it was "exploring" a rename.
EA’s Mr Jackson said Mr Weber’s provocative statement had been issued to show “the future was in our hands”.
The video-game company and Fifa held further meetings in Zurich last week, according to people familiar with the discussions, and a renewed naming rights deal remains a possibility.
But sticking points persist. Fifa would prefer to grant narrow exclusivity over its name, relating mainly to the sale of the video game. EA wants broader rights around the franchise, such as selling digital memorabilia as non-fungible tokens and running esports tournaments.
EA was irritated that it was not consulted on issues such as the push towards launching a biennial men’s World Cup, a project led by Fifa president Gianni Infantino that is designed to secure more revenues for his organisation.
Internal research also led EA executives to determine the company could be better off without Fifa. It already has 300 naming license agreements to ensure the biggest teams, players and leagues will stay within the game for years to come.
This includes deals with Uefa, European football’s governing body, which runs the Champions League; many top domestic football leagues around the world; and Fifpro, the player’s union, which holds the rights to hundreds of top players.
Facing the likelihood of losing its biggest commercial contract outside of staging the men’s World Cup, Fifa said it is “bullish and excited about the future in gaming and esports for football, and it is clear that this needs to be a space that is occupied by more than one party controlling all rights”.
For EA, cutting ties is a risk. Fifa helped to transform it from small video games publisher into a Fortune 500 company with a market capitalisation of around $39bn. The company does not split revenues directly associated to Fifa, but EA’s annual report said the game is “material to our business and will continue to be so”. The company has spent billions of dollars developing its game, with 1,500 employees dedicated to it.
Deals
The US – which for decades has proved resistant to football’s charms – is Fifa’s second-biggest market, after the UK.
EA executives have calculated it can go without some deals with important football groups, believing most gamers are unlikely to abandon the franchise.
The company next wants to invest in “volumetric capture”, a system that can take hundreds of hours of footage from past matches to create even more realistic action.
The aim is to replicate how ex-Brazilian star Pelé dribbled or former England international David Beckham struck free kicks. However, such technology will require a new and costly round of licensing deals.
“We’re not naive, things can change,” said Jackson. “But we don’t foresee major risks so long as we continue to meet players’ expectations in terms of the value of the entertainment they receive from the products we build.”
Copyright The Financial Times Limited 2021
