Impact: Soccer is the number one sport in the world and FIFA has been EA’s most consistent revenue generator. However, in much of the world FIFA has been heavily pirated and EA has not seen revenue from the game. Clearly F2P is a great way to generate revenue from markets where selling a traditional boxed game is simply not feasible. Digital revenue from products like FIFA are starting to make a real impact on EA’s bottom line. For the fiscal first quarter ending June 30, Digital net revenue increased by 17% year-over-year to $378 million, and accounted for 76% of the quarter’s revenue. Of that total, F2P transactions and DLC contributed $177 million, up 35% for the period over the prior year. Breaking that down a bit further, FIFA 13 digital net revenue was more than $70 million for the quarter, a 92% increase compared to FIFA 12 in Q1 FY 2013. In a conference call on July 23rd, Frank D. Gibeau, president of EA Labels, said Ultimate Team revenue alone amounted to more than $200 million for FY 2013. EA won’t say how much FIFA Online 3 is raking in, other than that the title’s digital net revenue grew 88% during the quarter compared to FIFA Online 2 in the same period of FY 2013. No wonder Electronic Arts sees dollar signs when it looks at the FIFA franchise’s F2P potential. The license has been huge globally as a packaged goods product. During the fiscal year that ended March 31, EA reported that it had sold 14.5 million units of FIFA 13 on all platforms. The publisher says both Brazil and Russia are priority markets, and this is why FIFA World is going to those countries first. Both countries have strong and growing online F2P segments, and in Brazil’s case, hosting the World Cup next year is only boosting that country’s football crazy culture. Furthermore, both Sony and Microsoft have invested heavily in producing their consoles in Brazil, so an F2P version of FIFA for PCs makes for a solid complement in that market. And with piracy still a big problem in both Russia and Brazil, neither market is one where EA wants to actively push the standard PC version of FIFA.
What we are unsure of is how well consumers will respond to the Ultimate Team monetization that forms the basis of FIFA World. It is one thing to have the athlete as virtual item purchase feature as an option in a retail game, yet little is known about what F2P players will have access to in FIFA World without purchasing players. Are they give a certain number of good players for free, or a complete team made up generic players and averaged stats? Obviously, competition will encourage paying for better players, but if the buy-in to compete is too steep too fast, we can also see where some online players will be turned off. Successful game monetization is a fine balance between accentuating enjoyment and reward at impulse pricing. But if players feel forced into buying, they often will walk away. Therefore we will be very curious to learn how wide a net EA is casting. Do they want a smaller, more financially secure base that intends to spend to compete from the get-go? Or do they want a larger base of players who will play for free and help promote the game to their pals? Given the power and the breadth of the FIFA brand, going core sports gamer alone would be a waste of potential in our view.