For those who don’t play a lot of video games, EA Sports’s FIFA is long-running football simulation video game franchise. It is developed and released annually by the video game company Electronic Arts (EA). Each year it is amongst the top selling video games. In fact, last year’s edition (FIFA 17) of the game was ’the best-selling console title in the world in 2016’ according to EA themselves. Even if you think such a statement might be a bit of a grand standing on EA’s part since they don’t release official sales numbers (industry analysts put it around 11 million copies sold), no one can doubt the game’s popularity. What will most certainly surprise you is the fact that game sales is not FIFA’s most profitable revenue stream. In actuality, what EA makes the most profit on is one games playing modes – FIFA Ultimate Team (FUT).
FUT was first introduced in 2009 (FIFA 09) and it is fairly simple at it is basic concept. The users put together clubs with virtual trading cards of football players and attempt to maximize their team’s attributes by maintaining team chemistry based on the players’ nationality, formation and position. Afterwards, they play with the team they build online or versus the computer in various leagues and cups. However, what is most interesting the in-game electronic market that the developers implemented to facilitate card trading.
It works in the following way. Every user can place the virtual cards he wants to sell on the market (via a timed auction) by setting an initial minimal bidding price and “Buy Now” price which can be paid at any time and the user who pays it gets the card. If nobody triggers the “Buy Now” the user with the highest bid will get the card at the end of the auction. Moreover, the only other way to acquire a player card is to draw it from a “randomized” card pack, which will cost you a certain amount of the in-game curency FIFA coins. As you probably have already guessed the chances of getting enough valuable cards to make back your investment or make a profit is pretty low. You probably have also guessed that you can buy card packs with real-life money. One card pack costs around 1,50 euros.
But what is the most important part of FUT’s electronic market is that you cannot buy individual player card from the market place with real money, you can only use FIFA coins. Therefore, the only quick way to build your dream team is to spend a ton of money by buying hundreds of packs in the hopes that you draw enough valuable cards that you can trade in the marketplace for the cards you really want. Of course, you can always play games to earn FIFA coins, but you will probably need to win hundreds of games to afford one Messi. You can spend hundreds of hours trading by identifying inefficiencies the market and slowly accumulating the amount needed for one Ronaldo. EA will certainly not help you in this quest as it will charge 5% brokerage tax for every transaction.
At this point you might say that this electronic market is totally fixed and biased, and question how many are going to be dumb enough to participate in it. The answer is millions (myself included) as FUT is the most popular game mode in FIFA. Of course, you don’t have to spend any real money to enjoy the mode. In fact, most people (luckily, myself included) have never spend a euro on buying packs and are happy to play with “cheaper players”, but those people who are willing to spend money more than make up for it. FIFA’s Ultimate Team is now estimated to contributes $800 million in net revenue annually, up more than 20% year-on-year. It is such a jougernaut that the Ultimate Team concept has been replicated in EA’s other sports franchises (Madden, NBA, NHL) and the company is looking for ways to incorporate in its other big franchises Battlefield and Star Wars Battlefront according to their CFO.
What do you think about introducing such types of electronic markets in video games? Is the future of video games and would you be interested in playing such a game mode?
References:
https://www.polygon.com/2014/3/19/5525710/fifa-ultimate-team-fifth-anniversary-ea-sports-interview
http://www.gamesindustry.biz/articles/2017-03-01-eas-ultimate-team-now-worth-USD800-million-annually
First of all, Very good post!
Secondly, I am very surprised that FUT is the most profitable revenue stream of EA. I have been playing FIFA since 2000 and never tried FUT. But the application sounds nice and I will definitely try it. Personally I think EA sports made a smart move with this application People always want to be better than their competitors and are willing to spend money on it. So I think more video games producers will introduce electronic markets in the future.
Hi Victor,
Like the way you explain how much money is actually behind the industry. I never knew it was that much. Personally, I see these types of money making methods by big game producers as the new standard. You encounter all the time that when a game is popular, the producer tends to sell shortcuts to players that want to be better as fast as possible.
In the past, you used to play for the game itself and the best players had usually put the most afford in it. Now, you can more or less buy quality and gain an advantage. In that sense, it is becoming more like real soccer, where a lot of money rules the game (PSG). Do you also see this kinds of similarities between the markets you describe here in comparison with the real world?