Brand Alliances
When jumping into an Uber, many people would be surprised to find out that with a Spotify premium account, you can control the music of your journey through the Uber app. The two brands joined forces in 2014, looking to add a personal touch for customers on their commute.
This isn’t anything new though, brands have been aligning themselves with other brands for years, with the idea that both share similar values and therefore can harness each other’s image and customers, ultimately enhancing sales and expanding their audience through a strategic alliance.
One of the most successful examples is the gaming company EA Sports and FIFA, the officiating body for football, but the partnership between these two brands is about to come to an end.
Since 1993, EA Sports has been producing football simulation games under the name FIFA and the game has become one of the largest in the world, smashing records for most copies sold and ultimately changing the way fans interact with football as a sport along with shaping the multimillion-pound gaming industry that exists today.
Given how successful the partnership has been there are many questions surrounding the break-up, in this blog, we will cover:
Background of EA & FIFA’s Strategic Alliance
FIFA games created by EA have been the pinnacle of football simulation games since the turn of the century, as can be seen from FIFA 21 selling over 30 million copies across platforms. In fact, just one game mode (FIFA Ultimate Team) contributes to 29% of EA’s yearly revenue ($1.6 Billion). So, FIFA is a big deal.
However, the relationship between the two brands has deteriorated over the years to the point that the last release of FIFA (23), unless something changes, was the last collaborative release. This obviously poses some interesting questions for the future of both brands.
In the beginning, EA Sports approached FIFA to create a football simulation game as it had for American sports in the past, such as Basketball & American Football’s governing bodies (NBA & NFL).
Initially, FIFA held a lot of the power in the alliance, given the gaming industry was a fraction of what it is today, however, the goalposts have changed with FIFA providing EA with no intellectual assets, other than the FIFA title.
FIFA games have exclusive features and game modes, and these come directly from agreements EA has with third parties, meaning UEFA, Leagues, Teams and even some players are all tied to exclusivity deals with EA Sports, not FIFA.
This plays a huge part in this story, as the relationship between the two companies has ruptured since FIFA allegedly asked for $300 Million to renew their naming rights (Double the last contract signed in 2018).
EA has seemingly decided that the EA Sports name carries enough influence and no longer needs FIFA’s blessing, as they hold these agreements with leagues, clubs etc. As such, the next FIFA game (FIFA 24) will not be produced by EA Sports, they instead will release ‘EA Sports FC’, which essentially will be the FIFA gamers are familiar with, without the name FIFA.
FIFA themselves have said that although EA isn’t releasing a FIFA-titled game, there will be one on the market. There is yet to be any announcement of who will produce the official FIFA video game and as most football seasons begin to come to a close, gamers would usually expect FIFA to be available around September this year. This currently seems unrealistic, yet the president of FIFA has bullishly stated, “The only authentic, real game that has the FIFA name will be the best one available for gamers and football fans.”
For many, it’s hard to say how this will play out – the FIFA games have dominated the football gaming world for years with next to no competition, so it will be interesting to see how both games perform as EA has the features gamers are comfortable with, and in terms of teams, players, and competitions it’s hard to imagine how another game could compete.
But FIFA is FIFA and as much as EA might disagree, the name will always be instantly associated with football simulation games. For the gaming world, and in general, ‘EA Sports FC’ just might not register the same way FIFA will with customers. On top of that many gamers argue through the monopoly EA has had on the market, the FIFA games had gone a bit stale, meaning some gamers could be persuaded to opt for the new version of FIFA as opposed to EA Sports FC.
What’s Next for EA Sports & FIFA?
Both brands stand at a crossroads in terms of brand identity without the other. For FIFA, this is probably less of an issue with the influence they already have within Football, and although EA has exclusive agreements, within the Football world FIFA still holds massive pulling power, with its own competitions. For example, EA will not be able to release any World Cup content without an agreement with FIFA, which they have done for every World Cup since the two joined forces.
So, with the reputation FIFA holds it’s hard to imagine they will struggle to find a developer for their game, but it looks unlikely we will be seeing FIFA 24 any time soon given the lack of announcements so far.
The real challenge for FIFA will be how do they differentiate themselves?
With EA’s FIFA dominating sports games for years, it’s hard to imagine how else a football game, or sports game in general, would work. EA really did set the standard with FIFA, and this can be seen in the similarities across other sports games that have incorporated their own versions of EA’s features.
How FIFA opt to differentiate will be interesting, with the biggest competitor of EA’s FIFA being Konami’s E-football (Previously Pro Evolution Soccer). In a left-field move, E-football was introduced as a free football simulation game with a focus on in-game purchase options rather than the usual upfront price point, however, the free game flopped massively suggesting that the price point alone would not be enough to drive people away from their beloved EA FIFA.
Other than price, the main ways a brand can differentiate are through product, image, distribution, and relationship.
Whatever FIFA decide to focus on to distance themselves from EA will be intriguing, but because of the lack of competition over the last few years within the football gaming sphere, it really is hard to say how to penetrate EA’s stranglehold. What we know for sure is how much weight FIFA carry with their title and regardless of how EA decide to position themselves, it could be hard to convey the authenticity of THE football game without the iconic FIFA name.
For EA Sports it’s a bit clearer what their game will look like as they hold almost all of the intellectual property that the previous FIFA games would have had. Whilst we don’t know for certain, it will probably look and feel the exact same as previous games, obviously a huge advantage to EA.
Although most gamers will be familiar with EA through their various titles, the impact on the brand image of EA will be the biggest shift and pain point as the FIFA name carries authority. The position they find themselves in now, similar to FIFA, is how they reinvent their image under a new title. The differentiation factors mentioned such as price, distribution and relationship will largely be the same with EA hoping the loyal FIFA fanbase will switch to EA Sports FC and emulate their previous success.
EA Sports do have an upper hand in the fact they have a wide portfolio of games including NHL, Madden NFL, F1 and many more, which release yearly – so even if EA Sports FC doesn’t live up to what EA expects, their diverse portfolio should put them in a position to release at least a few versions of the game over the next few years, which should put them in a better position to consolidate their brand and build on the loyalty they held from their previous games.
On the flip side of this, EA Sports basketball simulation game NBA Live hasn’t been released in over 3 years with many putting this down to the fact NBA 2K (The largest basketball game and EA Sports’ main competitor for basketball games) has been wildly more successful for the last decade, leading some critics to believe EA Sports FC could follow the same path if it doesn’t live up to the FIFA version of FIFA (not confusing at all!).
Strategic Alliances for Other Brands
The fallout between these two brands highlights some questions that should be considered for any business that collaborates with other businesses as part of their marketing efforts or strategy.
There are plenty of successful and unsuccessful partnerships and due to the popularity of the FIFA games to date, it’s fair to say both parties should be happy with how the past 30 years together have panned out. However, as discussed, it will be interesting to see where both brands go over the next few years.
From this breakup, there are two key lessons for businesses that work closely with other businesses. The first, from an EA standpoint, is to make sure your brand identity, beliefs and values are independent of the brand you collaborate with. EA has done this to some extent as they have an array of sports games they develop, meaning they are still very well respected within the gaming community, even without the illustrious FIFA branding.
On the other hand, FIFA boosted their reputation, their brand awareness and probably their audience too, which leaves EA in a strange position where they may have to prove their worth, assuming the average person is likely to still correlate FIFA games with… FIFA. Whereas they may feel their portfolio and previous involvement with the FIFA games should be enough to hold up their reputation, which is also fair.
So, when working with another brand you should consider what your brand image is prior to collaborating. How will the collaboration affect this image? And does the partnering brand share a similar outlook? If your collaborative efforts do come to an end, you could be left in a position where customers gravitate away from your brand as the link between yourself and the other business was all that attracted them to you. Whereas, if the values of both brands align, the customer will be more likely to build an independent affinity to your brand and thus remain engaged regardless of the cooperative efforts ending.
From a FIFA point of view, the lesson for businesses is to make sure your business doesn’t rely on one partnership, and that you can still function if this partnership breaks down. Of course, FIFA is confident that a developer will pick up their title but with the heavy fee of 300 million attached developers may be put off and, in this case, that would result in FIFA having no revenue from the gaming industry which has generated billions for them over the last few decades. It is slightly different for FIFA as they are a governing body of (probably) the most popular sport in the world.
From a business perspective if your business is reliant on only one partnership some sort of plan must be in place for if the partnership deteriorates, as your business could be left in a position of scrambling to find where you fit into the world without that partnership.
Conclusion
Despite the breakup of the gaming world’s favourite couple, this strategic partnership has been a huge success for over three decades, and when two brands with similar values and beliefs work together it can be hugely beneficial for everyone involved.
However, it is clear from the split of EA & FIFA that there is much to consider before partnering with another brand and it is pivotal to evaluate how your business will react if both businesses decide to go their separate ways. It’s hard to say how the next few years will play out for both EA & FIFA, but there are definitely lessons to be learned for any business owner in relation to strategic alliances and the impact partnering with another brand can have.