In an announcement made earlier this week, video games publisher Electronic Arts has confirmed that it will not renew its licence with football world governing body FIFA to make FIFA branded football games.
EA Sports, the sports division of Electronic Arts, has been the exclusive FIFA football games publisher for the last 30 years, but will now begin releasing its own branded football games (labelled “EA Sports FC”) from late 2023.
At the heart of this decision to terminate the successful franchise are a number of legal and commercial issues. Whilst EA will no longer be permitted to use the FIFA name on its games, EA has successfully secured licensing agreements with a number of key football stakeholders, including 19,000 athletes, 700 teams, 100 stadiums and over 30 football leagues. These licensing agreements (which sit outside of EA’s licence from FIFA) will ensure that EA retains its player, league and stadium naming rights for the EA Sports FC brand. EA’s ability to maintain and commercially exploit these rights are crucial to the success of its franchise, and will most likely determine whether it is able to attract the millions of current FIFA players worldwide to the new brand. EA’s success as a legitimate competitor to FIFA will also be a key factor in EA’s ability to retain lucrative sponsorship opportunities from brands and other partners.
The current licence from FIFA is due to expire this year, with speculation that FIFA are seeking to increase the cost of the licence by over 100%, to $1 billion dollars per four-year World Cup cycle. Whilst the decision to split from FIFA may be considered a risky one, EA may be hoping that establishing an independent brand will give them the opportunity to build an interactive platform that will create innovative in-game football experiences for players and sponsorship partners alike, whilst increasing market share of the valuable eSports sector. Although the motivation for breaking away from FIFA may ultimately be a commercial one, it is clear that the legal issues surrounding licensing, sponsorship and naming rights will play a vital role in determining whether EA’s new game franchise is a commercial success.
This article drafted by Ebony Ezekwesili