EA FIFA Shudders at the Loss of Cristiano Ronaldo and Juventus
Originally published on: CCN Markets
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July 20, 2019
As news spread of Konami prying the exclusive rights to Italian Series A soccer team Juventus for PES 2020 from FIFA 2020, EA’s share value dropped by 3.5%.
The new deal allows PES 2020 to feature the club name Juventus and its associated badge, jerseys, and playing grounds, while EA must resort to using the less glamorous, not to say fictitious, Piemonte Calcio club name. Nevertheless, FIFA 2020 retains the right to use real player names and their exact likeness.
We are incredibly honoured & excited to announce our EXCLUSIVE partnership with the most successful club in Italy; @Juventusfcen.
— Pro Evolution Soccer (@officialpes) July 16, 2019
For the outsider, this may seem inconsequential but puts Konami in a position to make a run for top dog. Is this a further sign of EA’s continued decline or merely a bleep in the publisher’s long history? The reality is more nuanced.
EA and Konami’s Long-Running Feud
Konami and EA have waged a long-running war for the title of premier soccer simulator, a see-sawing, tit-for-tat routine of securing rights only to lose them that dates back decades. The two publishers have swapped the mantle as one achieved better sales and the other fell out of favor. One could say that Konami’s latest licensing trophy continues this long tradition.
Landing licensing agreements is vital to keeping players interested in what are essentially yearly iterations of the same game with a few choice improvements and new gameplay features. These seemingly innocuous name changes can be the deciding factor when the player comes to make a choice.
In recent years, EA has loomed large over Konami as it secured the overwhelming majority of rights for teams and leagues, chief among these being FIFA itself and UEFA Champions League. Konami, on the other hand, has worked tirelessly to secure individual agreements with clubs bagging the likes of Barcelona, Arsenal, and Inter-Milan.
The clubs themselves stand to gain the most from the ongoing licensing feud between EA and Konami. Kindling that fire by jumping ship every so often is a surefire way to hike up the price as both sides clamor for rights. Playing them off one another lays the foundation for a more lucrative deal next time around.
Style Over Substance
PES has long been considered the better mechanical game, offering a more faithful portrayal of the beautiful game through in-depth features and gameplay. Unfortunately, drawn in by the superficial pull of popular clubs just like Juventus and their star-studded rosters, players have flocked to the arguably diluted FIFA experience.
With the addition of not just Juventus but the world’s most famous soccer player, Ronaldo, the appeal of PES 2020 has grown considerably and could prompt other clubs to follow suit. If this were to happen, FIFA’s decline would be inevitable as more players migrate over. The fear is that Juventus may be the tremor that triggers a tsunami.
More of the Same for EA
For EA, FIFA’s importance in its roster must not be understated. Over the last three years, the franchise is responsible for over 14% of the publisher’s total revenue, which for a company that raked in $5.16 billion last year alone is a serious cash cow. Should PES trump FIFA in the eyes of the consumer, the ramifications on EA’s financial outlook would be dire.
As for the small dip in share value, this isn’t all too uncommon for the gaming giant. No later than earlier this month, the company’s share price fell by 5% as Season 2 of its battle royale shooter Apex Legends hit servers. Viewer numbers on streaming platform Twitch were lower than anticipated, causing fear among investors.
In the broader context of EA’s recent track record, the loss of Ronaldo and Juventus compounds a steady decline in share value since summer 2018. A well-publicized loot box controversy, Anthem’s lackluster reception, and waning interest in Apex Legends have hit hard.
Konami has landed a well-placed punch in the gut that could have serious consequences for the FIFA franchise.