‘A sense of pride and accomplishment’
EA hardly pioneered the tired techniques that cajole microtransactions out of gamers. But it might have done more than any other major publisher to bring them to a mainstream, premium price console game.
After originating in Asia — first in Chinese games like ZT Online and then in mobile games across the region — it was the rise of smartphones in the West that established free-to-start games as a norm. PC games like League of Legends and World of Tanks picked up the format as it became the fastest growing segment of the gaming industry at the time.
This time period coincided with the tail end of the PS3 and Xbox 360 generation of consoles. As developers looked to the next wave of very-online gaming machines, the big question was how would they keep gamers continuously spending after they’d shelled out the cover price of a title, said Gee from Bank of America Merrill Lynch. According to Gee, EA’s profit margins hovered around four percent at the time.
After experimenting with the Ultimate Team concept in the Xbox 360 version of UEFA Champions League 2006–2007, a standalone title, EA pushed it as a $10 add-on in 2009 for FIFA 09.
It made $10 million in its first six weeks and more FIFAplayers were online than ever before. Peter Moore, then-president of EA Sports who later became CEO of a resurgent (and non-virtual) Liverpool Football Club, called EA’s pivot to online gaming a “radical shift that we’ve helped pioneer in the industry.”
Microtransactions, downloadable content and other “live services” as EA termed them, became the company’s fastest growing business. Four years after its full debut in FIFA 09, Ultimate Team was part of every EA Sports franchise including Madden NFL, NBA Live and NHL. Andrew Wilson, who had overseen FIFA as Ultimate Team was blooming, became CEO of EA, a title he holds to this day.
“I feel that once Andrew Wilson took the CEO role, his expertise in that mechanism and the ability to grow that business actually filtered down into other areas of business beyond sports,” said Gee. “I think you can attribute a lot of what you see in EA’s business today, in terms of the in-game mechanisms, to Ultimate Team back in 2009.”
“Everybody wants revenue where a player every single day logs in and plays the game” – Michael Pachter
EA was now implanting this business model in all genres of games: mobile strategy game Dungeon Keeper, racer Need for Speed: Payback, RPG Mass Effect 3. The company was hardly alone — in Counter-Strike: Global Offensive and Team Fortress 2, Valve was visibly looking for the same formula. And it was clear why. Microtransactions, add-ons, in-game events — all of these were cheaper to produce than developing new AAA titles from scratch, and they provided the kind of predictable, regular revenue that investors love.
“Everybody wants revenue where a player every single day logs in and plays the game,” said Michael Pachter, an analyst and videogames expert at Wedbush Securities. “That’s the most predictable basic model. The reason that Starbucks has value is because it’s a habit, people go there every day.”
Ultimate Team runs in tandem with global football seasons, its in-game events mimicking the peaks and troughs of players’ performances in real life. Crucially, EA has a captive audience in FIFAbecause it holds the license for most of the world’s major football clubs, with only a few exceptions. That means only EA — and not its closest rival Konami, which makes Pro Evolution Soccer— can publish a game with the most authentic kits, badges, stadiums and team names. That reason alone is enough to guarantee a steady demand for FIFA, just as it does with EA’s officially licensed Star Wars games.
“There isn’t a small games company that is run in a way that people prefer that could afford to buy those rights from FIFA,” said Salem from Futhead, referring to football’s global governing body which licenses its own name and tournaments to EA for the game. “So essentially, it’s always going to be the biggest, wealthiest, probably most powerful and — in some way — institutional gaming company that owns the rights to football. And that is EA.”
By 2016, EA was making about $650 million a year from Ultimate Team. But in tandem with these boom times, something else was happening. In 2013, EA was named “worst company in America” for the second year in a row by The Consumerist. After the peak of consumer backlash against EA’s loot boxes in Star Wars: Battlefront II, the company earned the ignominious distinction of a Guinness World Record for the most downvoted Reddit comment in history as it struggled to justify its game design as providing “a sense of pride and accomplishment.” Fast forward to 2019 and EA was jeered yet again for telling a UK Parliamentary committee that their loot boxes are “surprise mechanics” like Kinder Eggs which are “actually quite ethical and quite fun.”
Cumulatively, EA has garnered a reputation as a nakedly bottom-line driven publisher. Being at the top of an industry tends to put a target on one’s back, and overblown pearl clutching has often followed game makers. But just how vocal gamers have been against microtransactions and the publishers that push them is unique, says Cam Adair, the founder of Game Quitters, a support group for gaming addicts. “Typically, the gaming community is very defensive about their games and about their industry,” he said.
The idea of paying to win is inherently offensive if you play games; fair competition is a basic assumption of any game. Microtransactions — especially in a game you’re already paying to own — might feel like a corporate intrusion on the closed respite of the game world.
“It’s the game company against the gamer,” said Adair, “whereas traditionally they were on the same team.”
There is very little business incentive for EA to change its reliance on loot box monetization right now. The potential levers to change that are regulatory pressure, legal pressure and public pressure.
The U.K. government recently launched a call for evidence on loot boxes after a group from the House of Lords recommended they be regulated as gambling. In the U.S., loot box state legislation has been in the works for years — in Hawaii, Indiana, Minnesota and Washington among other areas — but development has stalled this year amidst a pandemic and political instability. But a string of class-action lawsuits in California are challenging not just EA but Supercell, Activision, Apple and Google (the latter two for selling loot box games through their app stores), while EA is also facing court battles in France and Canada. Another lawsuit in California alleges AI difficulty adjustment makes players perform worse than they should in Ultimate Team to incentivize buying packs (EA denies the claim).
Yet the winds of public opinion are already clear. Overwatch and Rocket League have shifted their microtransaction methods away from unpopular loot boxes as battle passes gain popularity. Games like Fortnite and Call of Duty: Warzone sell cosmetic items over performance-enhancing ones, sidestepping the pay-to-win controversy altogether.
Christopher Hansford, political engagement director at Consumers for Digital Fairness, which advocates against loot boxes in gaming, says that regulatory pressure in enough jurisdictions — such as the ban in Belgium where EA can no longer sell Ultimate Team packs for money — could lead EA to preemptively change their monetization method altogether. “I don’t think that EA has the capacity or the interest to try to roll out different models of their product in different states to try to comply when they can make a core product from the ground up that everybody can buy,” he said.
One recent concession from EA is the introduction of a “Playtime” tool, not dissimilar to Apple’s “Screen Time” feature on iPhones. Playtime allows parents and players to set limits on both time and money spent in FIFA.
But it doesn’t alter the core game incentives. The core question remains what would Ultimate Team look like without paid packs? FIFAhas experimented with introducing non-paid cosmetics into its ‘Volta’ futsal mode and stadium customization in Ultimate Team but the awkward issue is that those aesthetics likely do not incentivize FIFAplayers to spend the way a rare, playable Kylian Mbappe card can.