EA's problem with the Ultimate Team sales scandal | This Week in Business

Last week we said some nice things about Electronic Arts in this space, so in the interest of balanced reporting, this week we'll talk about loot boxes.

There was a scandal in the FIFA Ultimate Team fandom this week as people on social media began passing around screen captures of chats and videos that purportedly show an EA employee trying to sell rare Ultimate Team cards to players for hundreds or even thousands of euros. (It's unclear how rare those cards are -- EA only tells people it's a less than 1% chance -- so it's difficult to know if those could actually be considered fair prices.)

Player outrage over the reports gained enough traction that EA released a statement saying it had begun "a thorough investigation" and would "take swift action" if it finds any improper conduct by its employees. It also had this line:

QUOTE | "We want to be clear -- this type of behavior is unacceptable, and we in no way condone what is alleged to have happened here. We understand how this creates concern about unfair balance in the game and competition." -- EA, in its very serious comment about this very serious scandal.

If we take the statement at face value, EA is worried about "unfair balance in the game and competition," which is an odd position to hold when you're the one who created the Ultimate Team business model specifically so that players who threw obscene amounts of money into the game would have a significant competitive edge over those who didn't.

I understand why they would object to the aforementioned obscene amounts of money lining an employee's pockets rather than the company coffers, but that's the sort of objection you probably take care of in private rather than touting it to the masses as evidence of your pay-to-win game's competitive balance.

The company may also be reluctant to call it embezzlement or anything like that, as EA's go-to defense for why loot boxes don't count as illegal gambling is that virtual currency and items are not "things of value" as described in gambling laws. (Incidentally, that defense doesn't seem to be very effective; it failed EA in the Netherlands and Big Fish Casino in a Washington court case.)

Maybe EA is opposed to it because it doesn't want its players getting scammed. I mean, it would be tragic if somebody spent a small fortune to get these rare cards but never actually received them. And by "tragic," of course I mean, "FIFA Ultimate Team's actual business model working exactly as intended."

Perhaps EA is just philosophically opposed to one-time transactions where the customer knows exactly what they're buying, how much it will cost them, and won't be bugged incessantly to buy piecemeal add-ons to complete the experience.

One objection I can see here is that this supposed employee seller is dealing with people one-to-one through social media and direct messages. It's simply not scalable in the way EA would need the business to be in order to service the entire Ultimate Team player base. This is where the actual competitive advantage comes in; only those players with access to this mystery dealer would be able to load their teams up with the best-of-the-best cards on demand. The rest of the field would have to keep sinking money (and time) into opening packs and hoping to come across these exceedingly rare cards, the way EA has always intended.

EA could, of course, add the option to buy individual cards for hundreds or thousands of dollars. And some people would, of course, pay those prices. But EA won't start doing that, because it makes the entire sordid business entirely too transparent.

Charging people €1,700 for three cards so they can have a competitive edge is outrageous. Obscene. Exploitative. And it would be called out as such by parents, the press, and possibly even politicians.

On the other hand, allowing people to spend €1,700 (or more) to get the three cards they want by gambling away a few bucks at a time, all without disclosing exactly how rotten the odds of getting those cards are... That's just good old-fashioned innovation.

STAT | $1.49 billion -- EA's net revenues from Ultimate Team modes in 2020 (about 27% of all the publisher's revenue), according to EA's annual report.

STAT | $15 billion -- Juniper Research's projection of how much loot boxes worldwide generated in 2020, which would make EA representative of 10% of the entire market.

STAT | $53.9 billion -- The size of the worldwide console market in 2020, according to Ampere Analysis.

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