The launch of EA Sports FC 24 is one of the most significant moments in EA's history
Will EA's cash cow continue to thrive without a big name?
What happened
FIFA and EA were unable to reach an agreement to extend the license for using the FIFA brand. There were two reasons - according to reports from journalists, FIFA demanded a two-fold increase in annual fees (from $150-180 million to $300-360 million) and the removal of exclusivity for using the brand in games.
EA was the largest licensing partner by revenue for FIFA.
EA's conditions upon the name change
The new installment of the football simulator will be called EA Sports FC 24, not FIFA 24.
FIFA is a global leader in its genre. In the 2022 fiscal year, the series generated $2.6 billion in revenue. The net profit from the Ultimate Team mode increased from $26 million in the 2010 fiscal year to $1 billion in 2020.
Ampere Analysis reports that the total Monthly Active Users (MAU) for FIFA games in August 2023 is 31 million users. FIFA 23 has 22 million, while FIFA 22 has 5 million. The rest play older games in the series.
What is happening now
EA Sports FC 24 was released on September 29th. The release became the second highest-selling game in the UK in its first week, following The Legend of Zelda: Tears of the Kingdom. However, the overall physical sales are 30% lower than FIFA 23 at launch.
To draw conclusions, it would be appropriate to wait for complete sales data. We need to look at the distribution of physical and digital versions.
Ending the partnership with FIFA forced EA to remove all previous games in the series from stores. Now, only EA Sports FC 24 is available for purchase.
EA has decided to disable online functionality for FIFA 21 and earlier games in the series. Traditionally, the company maintained servers for 5 years. Thus, the company likely wants to motivate the old audience to upgrade to EA Sports FC 24.
EA's management has stated that part of the "freed up" $150-180 million will be spent on marketing the game.
FIFA has announced that it is actively seeking partners who can develop football games.
Risks
The biggest risk for EA is the loss of the FIFA brand name. Many buyers purchased games from the series because of the familiar abbreviation. EA is likely to lose some "casual" buyers who are not fans of the series. Otherwise, the company still has everything except the brand.
For FIFA, the situation looks much bleaker. The company has lost its main business partner, and there are no developers of football simulators in the market except for Konami and Strikerz. Moreover, surpassing EA in terms of technical infrastructure will be practically impossible.