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EA generates $1.6 billion from FIFA Ultimate Team

Back in 2019, payments within FIFA’s Ultimate Team (FUT) made more money for EA than the game itself. And they’ve only become more profitable since, according to a report from Metro Gaming

However, it's now a revenue stream that is coming increasingly under threat. 

Photo Source: The Times
For context, FUT is a game mode within FIFA where, instead of choosing a pre-made team or drafting players, you build your team using player cards acquired via loot boxes. These can be purchased using either in-game currency or real money.

It's not limited to FIFA either, it’s also included in EA’s NFL game, Madden, too. And publishers (including EA) are very reliant on the income these game modes generate (through the in-game purchases).

To be precise, FUT generated $1.6 billion in net revenue in the 2021 fiscal year. That's 29% of EA's total revenue.

However, the loot boxes within such games are facing pushback due to a concern they are linked to the development of problem gambling in adolescents. 

Belgium has banned them and the Netherlands are looking to follow suit. Concerns have also been expressed by the UK government and in the US, Illinois is looking to become the first state to regulate loot boxes in any way.

If these actions are successful, it could pose a serious threat to EA, who have appealed the decision in the Netherlands.

In response, EA has also recently started selling FIFA 21 cosmetics outside loot boxes for the first time. However, there are numerous issues here - from cost to reduced engagement. As such, the jury is still out on finding the right alternative revenue model.
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HAPPY BIRTHDAY TO US!

A year ago, mid-lockdown, I started Sports Pundit. 

The idea was to create a newsletter that would allow me to network with lots of awesome individuals who were much smarter than myself - and that goal was achieved. 

I'm really proud of the journey so far, particularly the fact that I've consistently sent out a newsletter every week for a year now. I hope it can serve as inspiration to back yourself on that idea or concept you have in your mind.

I have no plans to let up over the next year and I'm excited to see what it brings. Thank you to everyone who has read, shared, and liked this newsletter over the past year, I'm extremely grateful.

To show just how grateful, I thought it would be timely to set up a loot box themed competition.


For a chance to WIN a football shirt, all you have to do is forward this email to friends, family, or colleagues who you think would enjoy it (and CC me in).

For each person you forward it to, you will receive one entry into the prize draw. (The football shirt will be determined at random by an FUT loot box). I will announce the winner on the 15th of June. Best of luck!

Thanks again, 

Andy 
THOUGHT FOR THE WEEK 
Photo Source: GIPHY
Last week Naomi Osaka announced she wouldn't be doing any press at Roland Garros and it's caused a s#!* storm - to put it mildly.

A lot of people have weighed in on the matter, and the world no. 2 could have have faced expulsion from the French Open. That is, until she decided to withdraw from the tournament last night. 

While I'm not going to weigh in on whether she should or shouldn't have avoided the press (there's enough opinions out there already), I do agree with Osaka's belief that "change makes people uncomfortable." 

Billie Jean King tweeted that, "In our day, without the press, nobody would have known who we are or what we thought. There is no question they helped to build and grow our sport to what it is today." 

However, while a lot has changed since the days of King, press conferences have barely evolved.

In a world where we have direct access to athletes via social media and endless creative content - often produced by rights holders who increasingly view themselves as "media companies" -  are press conferences still the best use of athlete's, rights holder's, and media's time?

A few good examples of alternative content (as highlighted by Rich Johnson) includes Mercedes F1’s race debriefs, and Gary Neville's YouTube channel, The Overlap. Importantly, these forms of content are not only more engaging, but also safeguard players when they're vulnerable. 
WEEKLY ROUND UP 
Here's a few of the top articles that I've come across this week. I hope you enjoy!
Photo Source: EFL
Governance and Finance
  • Brentford secure promotion to the Premier League beating Swansea 2-0 in Championship play-off final: Bloomberg cite the big data model that helped them to win soccer’s richest game. 
  • Prospective Timberwolves owner Marc Lore says he and Rodriguez ‘excited to put everything we know into building the organization’ 
  • Sky Sports News research in collaboration with the Women's Sport Collective reveals 79% of women have felt unsafe out exercising
  • How sports leagues can improve their diversity: An analysis of the NFL and MLB’s hiring initiatives by LawInSport
Photo Source: AdAge
Broadcast and Media
  • Advertisers see the potential for commerce if Amazon acquires '007,' 'Rocky,' and a deep library of film and TV with MGM deal, reports AdAge
  • The New York Times is looking into a potential acquisition of The Athletic, three sources familiar with the matter tell Axios.
  • Jake Paul agrees deal with Showtime to air his next match after fighting twice on Triller. His new network is already set to broadcast his brother's exhibition match against Floyd Mayweather. 
  • Women led sports media startup The Gist raises $1m to challenge sports reporting norms, as per TechCrunch
Photo Source: La Publicidad 
Sponsorship and Marketing
  • Sevilla’s Sporting Director Monchi has landed outside Old Trafford with a message regarding transfer news in a unique sponsorship activation with AliExpress
  • Chelsea and Man City’s front of shirt sponsors (Three and Etihad Airways) received £4.2m worth of exposure from Champions League Final, according to analysis by Nielsen Sports.
  • Social media and marketing agency, The Goat Agency, were among four sponsors revealed for a quartet of teams in the Racing League for 2021. 
  • Romelu Lukaku has become the latest investor in Therabody as part of a deal that will also see him serve as an ambassador for the wellness technology company.
Photo Source: ESPN
Technology
  • Genius Sports wins data partnership with NBA’s Basketball Africa League.
  • Euroleague Basketball has become the latest sports property to launch a series of digital collectibles after signing its first joint commercial deal with its players’ association.
  • Dream Sports has invested $50m into its in-house sports content and commerce platform, FanCode, through it's investment arm. 
  • 61% of all sports organisations do not use data for their overall strategy, according to research conducted by (Sports Pundit readers) Bas Schnater and Geoff Wilson.
SPORTS PUNDIT NETWORK
Welcome to the the Sports Pundit Networking Series. The aim is to promote Sports Pundit readers and foster a greater community across the newsletter. For the latest edition, I caught up with Jake Kline, a law associate (and shrewd aggregator of sports business news from across the pond via his Twitter - as identified by Sportico's John WallStreet).
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GUEST CONTENT

Due to travel restrictions in place last year, Overwatch League took place with athletes and teams competing from various countries around the globe. This caused a unique problem but also highlighted a prime opportunity, writes Jake Kline. 

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Quick ask. It takes me hours each week to put these newsletters together so if you enjoyed this edition, it would mean a lot to me if you could share on social or forward to friends and colleagues! Thank you. 

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