Sunday, September 25, 2022

FIFA takes on EA Sports video games in new football rivalry

LONDON ( Associated Press) – The name “FIFA” may bring to mind images of the World Cup and football greats like Pele, Zinedine Zidane or Lionel Messi. The acronym for the sport’s governing body may also be reminiscent of some brazen bribery and corruption.

For many, however, it is the video game that is synonymous with FIFA.

For over three decades, the Switzerland-based football body has enjoyed a prosperous, mutually beneficial relationship with EA Sports. The annual edition of the video game, along with the associated products, has raked in billions of dollars and has proven so lucrative that FIFA thinks it could earn even more on its own.

FIFA on Tuesday announced Electronic Arts Inc. The licensing deal with the U.S. broke the partnership, making FIFA23 the last new EA game with participation from both sides.

Now they are becoming antagonistic.

EA will continue to make soccer games with the best players and biggest teams, simply removing them from the FIFA brand and being called EA Sports FC instead.

Confusingly, perhaps, FIFA24 should also be on the shelf next year as the football body appears determined to go ahead with its own launch.

EA has already begun to highlight its advantages over the FIFA game, as it has the authority to feature 19,000 players from over 700 teams in more than 30 leagues, playing in 100 stadiums. Manchester United, Barcelona and Paris Saint-Germain will still be present with their best players.

“It’s the only place you can have an authentic, celebrated and fully representative football experience,” David Jackson, EA Sports FIFA’s vice president of brand, told The Associated Press. “I think there’s an element of potential confusion in the market.”

Hyperbole from FIFA is already trying to curtail EA’s marketing, claiming it is in talks with several rival gaming companies and plans to enter the metaverse.

“I can assure you,” said FIFA President Gianni Infantino, “that the only authentic, genuine game with the name FIFA will be the best available to gamers and football fans.”

How this will be achieved is unclear, although FIFA holds the rights to the biggest soccer show on Earth. The World Cup will disappear from EA Games.

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“The name FIFA is the only global, original title,” Infantino said. “FIFA 23, FIFA 24, FIFA 25 and FIFA 26, and so on – the constant FIFA name is and will always be and will be the best.”

Such bombastic talk puts pressure on FIFA to carry out Infantino’s vision for a game that uses an EA franchise despite leagues like the Premier League – and not having the rights to the teams that play in them.

“New entrants will face a steeper licensing curve to compete with EAs,” said Andrew Maroc, an analyst covering the digital media sector at investment bank Raymond James.

Soccer gaming is big business for EA. The annual report released this week showed revenue of $6.19 billion.

“We have the biggest year yet for EA Sports FIFA games – the FIFA deal will expire at the end of the year,” EA Sports CEO Andrew Wilson told investors on Wednesday.

A large portion of the revenue comes from Ultimate Team Mode, where customers purchase additional content in EA Sports games. It earned $1.623 billion in 2021.

EA told investors, “We have historically derived a significant portion of our net revenue from sales related to our biggest and most popular game, FIFA, whose annual editions consistently rank among the best-selling games on the market. “

Brand loyalty will be important from next year onwards. Will gamers stick with EA’s rebranded product or jump for a rival being launched by FIFA?

It’s already a competitive market with eFootball, the former Pro Evolution soccer game produced by Japanese firm Konami. That game features a partnership with Manchester United, although the record 20-time English champions will still join EA’s Games through a Premier League deal.

EA has already warned its investors about the risks to its soccer gaming business from rivals.

“Any event or circumstances that negatively affect our FIFA franchise, such as the quality of a product or service, other products that incur a portion of consumer expense and time, the delay or cancellation of the launch of a product or service, Increased competition for major licenses, or actual or perceived security risks, could negatively affect our financial results to a disproportionate extent,” EA said in its annual report.

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JPMorgan analyst David Karnowski said in a client note that EA should have an edge over FIFA while retaining its 300 licensing partners, 30 leagues and federations, 700 teams and 19,000 athletes.

“While it is difficult to imagine that the brand shift would not have at least some impact on sales, the $150 million available to FIFA from the absence of a license fee provides ample space for marketing to raise awareness of EA Sports FC, Karnovsky wrote.

Isolating itself from the world of football politics has its benefits for EA. European body UEFA and its South American counterpart CONMEBOL have sidelined FIFA to begin their meeting of champions due to tensions between regional federations. Italy and Argentina will meet at the start of the final on 1 June at Wembley Stadium in London. It would seem inconsistent for EA to promote its FIFA game in match.

“What name will we put on the perimeter board at the UEFA-CONMEBOL event? It is really hard for us to keep FIFA there,” said Jackson, EA’s vice president of brands. “Which has previously been a springboard for our brand, and many An accelerator for that years ago, has become less valuable to us over time.”

EA might have saved the FIFA brand as well. The association with video games by so many fans has been balanced against the toxicity of the Sepp Blatter-era organization since the opening of a comprehensive criminal investigation into football corruption in 2015.

“If you ask a young football fan what FIFA is, they are more likely to say it’s a video game than a global governing body, but that value stays with us, I believe,” Jackson said. “We are the dominant voice in the world of football from an interactive entertainment perspective, and we don’t see a world where that will change.”


Associated Press writer Michelle Chapman in New York contributed to this report.


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