Electronic Arts Inc announced on Tuesday it was officially ending its two decade long video-gaming partnership with world soccer governing body FIFA.
The move comes after months of tense negotiations as FIFA officials demanded $1 billion for its licensing rights from the company.
Their 29-year partnership was set to end after this year’s World Cup in Qatar, but has now been adjusted to run through the Women’s World Cup next summer, according to the New York Times.
EA CEO Andrew Wilson promised the last game will be the biggest yet.
Once that is over, though, the video game giant plans to launch EA Sports FC in 2023, an interactive form of gaming in collaboration with more than 300 partners across the world of soccer.
The new game is expected to feel similar to the millions of FIFA video game players around the world, as much of the most famous soccer clubs and stars will still be playable due to separate licensing agreements with their teams and leagues.
It will likely offer players the ability to watch real-life matches, experience Fortnite-like in-game events, and give users a broader range of branded in-game items, BBC reports.
But major FIFA events, like the World Cup, will not be included.
‘The world of football and the world of entertainment are changing, and they clash within our product,’ David Jackson, vice president of EA Sports, told BBC.
‘In the future our players will demand of us the ability to be more expansive in that offering. At the moment, we engage in play as a primary form of interactive experience.
‘Soon, watching and creating content are going to be equally as important for fans.
‘Under the licensing conventions that we had agreed with FIFA10 years ago, there were some restrictions that weren’t going to allow us to be able to build those experiences for players,’ he noted.
Still, shares of EA, which is expected to report its quarterly results after markets close on Tuesday, fell nearly 3 percent in afternoon trading following the news.
Electronic Arts Inc announced on Tuesday it was officially ending its two decade long video-gaming partnership with world soccer governing body FIFA, which have generated some of the most popular video games. Here, video game fans are seen playing the 2014 version of the game in Madrid, Spain
The partnership dates back to 1993, and has since generated more than $20 billion in sales. A screenshot of the 1993 game is pictured
Electronic Arts Inc. is now planning to launch EA Sports FC in 2023, an interactive form of gaming in collaboration with more than 300 global soccer partners
Shares of Electronic Arts Inc fell in afternoon trading as the news broke
The soccer games have long been a popular staple among millions of players around the world, drawing in casual gamers and esports fans. Over the past two decades, the game has generated more than $20 billion in sales.
But as FIFA and EA’s most recent deal – signed 10 years ago – was about to expire, FIFA officials demanded more from the video game company, the Times reports.
It was seeking to at least double the $150 million it gets annually from EA Sports, its biggest commercial partner.
And it demanded the ability to attach its brand to other video games – which analysts say proved to be a bridge too far for EA Sports.
‘If you’re breaking a relationship that goes back over 20 years, there will be consequences,’ Gareth Sutcliffe, a senior analyst in the video game sector at Enders Analysis, told the Times.
‘EA will continue to motor on: They have got all the technological smarts, the creative implementation of an absolutely fantastic football game – and it really is fantastic.
‘But what do FIFA have? Their name. And then what?’
A screengrab from the 2022 version of the FIFA game, which features the likeness of some of the world’s best soccer players
The current agreement between EA and FIFA will expire following the Women’s World Cup next summer, after which EA will launch its EA Sports FC
In fact, EA already has already signed up 19,000 athletes, 700 teams, 100 stadiums and over 30 leagues for future games.
It has more than 300 licensing agreements with world soccer organizations like the UEFA, which runs the Champions League, as well as from domestic leagues and competitions around the world.
Those partnerships will allow EA to continue to use the names and likeness of not only players also world-famous clubs and prominent players.
And just moments after EA announced the end of its historic partnership, some of the world’s largest soccer clubs announced they will participate in the new EA Sports FC.
They each tweeted: ‘We are in the club, learn more July 2023.’
Now, if FIFA tries to find another video game partner, they are going to be limited with what they can do, the Times reports, as two of the world’s largest club competitions – England’s Premier League and European soccer’s elite Champions League – will only be available to players of EA Sports FC.
‘EA Sports is a long-term and valued partner of the Premier League, and we look forward to continuing to work together in the new era,’ Richard Masters, chief executive of the Premier League, said in EA’s statement announcing the split.
It also included comments from officials representing the governing bodies of Europe and South America, as well as the heads of the German and Spanish Leagues.
Several major soccer leagues tweeted after the news that they are going to partner with EA Sports FC
EA has previously said it will not allow other video game giants to use its name if they were to end their partnership, the Times reports, and the video game giant is now looking to partner with more companies and brands that FIFA did not approve of.
The gaming giant has made the soccer governing body’s games profitable over the last 29 years, using new strategies like the creation of player packs, which require users to spend money as they build their dream rosters.
Still, Wilson says he hopes he could create more World Cup games, offering an olive branch to FIFA by insisting there could still be a separate deal made.