[1/2]A smartphone with the Electronic Arts logo is seen in front of a displayed stock graph in this illustration taken September 16, 2021. REUTERS/Dado Ruvic/Illustration/File Photo Acquire Licensing Rights
Sept 29 (Reuters) – Electronic Arts (EA.O) on Friday launched its first soccer game without the FIFA tag, betting its “FC 24” title will maintain the momentum in its best-selling franchise and provide a bulwark against an industry slowdown.
A near three-decade partnership between EA and FIFA ended last year over what media reports said were demands that the videogame maker double its yearly payments of $150 million to the governing body of world soccer.
That has left “FC 24” without the visibility and marketing heft the FIFA brand enjoyed. The game’s success is crucial to EA as some analysts estimate the franchise accounts for a major chunk of the company’s sales and its $32 billion market value.
“The end of such a high-profile partnership … creates an uncertain future for the publisher,” said Joost Van Dreunen, a lecturer at NYU’s Stern School of Business, in his newsletter.
“Both gamers, who fear a weakening of the franchise, and investors, worried about how it will impact EA’s ability to generate revenues, are watching closely.”
EA has tried to boost the appeal of “FC 24” with new features such as cross-platform play and HyperMotion V technology that uses data from real footage to program in-game movements.
The game’s standard edition retails for $69.99 in the United States, while the ultimate edition sells for $99.99.
Analysts also believe the FIFA split should unlock a bigger marketing budget for “FC 24”, which has retained licenses to most of the soccer leagues, teams and players.
“EA spent under 10% in marketing prior to losing the FIFA name and they’re able to probably double that to 16%,” said Wedbush Securities analyst Michael Pachter.
“I’m confident that sales won’t suffer … the company is expecting a small decline and they’re talking like 5%.”
Pachter also pointed to the strength in the franchise’s Ultimate Team game mode, which accounts for more than a billion dollar in sales annually by allowing gamers to purchase card packs to create their virtual teams.
This has helped EA at a time its other games including Apex Legends are grappling with a post-pandemic slowdown. The company missed net bookings expectations last quarter and laid off 6% of its workforce in March.
Reporting by Zaheer Kachwala in Bengaluru; Editing by Shinjini Ganguli
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