Electronic Arts, publishers of Apex Legends, shut down revenue-sharing talks with esports teams through in-game skins after top-tier organizations came together to request a 50/50 split of revenue on the items.
In the past 12 months, a number of high-profile esports organizations have exited Apex Legends esports, with some, such as Team Liquid, directly citing monetization issues as part of their decision.
It was rumored that EA had reneged on an agreement to provide revenue sharing through in-game skins with team branding, leading to frustration among esports teams.
According to a report from Digiday, EA initially offered a flat $60,000 fee for each team. The majority of the 20 teams involved responded, imploring EA to implement an uncapped 50/50 revenue share instead.
What happened to Apex Legends revenue share with esports teams?
EA reportedly changed their minds on the revenue-sharing idea, which led to the initial offer of a flat $60,000 fee for each team. The teams felt this was “far below fair”, and made reference to the much more lucrative revenue shares available in other esports titles.
Although the specific game is not mentioned, Valorant and CS:GO have both generated seven-figure sums for esports organizations through their revenue share schemes, with skin bundles and team/player stickers respectively.
In response, a letter led by TSM and Liquid and signed by 14 of the 20 teams was sent to EA. “We are not comfortable with the proposed licensing offer, nor do we believe that the decisions made around it have been done so in good faith,” the letter stated, requesting the uncapped 50/50 revenue share.
EA’s response was a revised offer that still avoided revenue sharing. Instead, payouts would be based on which teams’ skins would sell the most: The top three would receive $160,000, the next three, $120,000, the following six, $80,000, and the bottom eight, $60,000.
When the teams countered yet again with a request for 50/50 revenue share, EA reportedly shut the dialogue down, stating they would “internally discuss” how they would work with the orgs in the future for “mutually beneficial partnerships”.
The esports team skins were due to release in October 2022, but the dispute was still ongoing behind the scenes in mid-September. Later that month, the skins were leaked by a renowned dataminer.
The previous ALGS in-game items were only player banners, a much less desirable cosmetic than skins, and the sales of these items were poor. One team exec said that they were not involved with the designs and that they were “a product that nobody wanted.”
But these low sales perhaps discouraged EA from the revenue-sharing plans. Unlike other publishers and developers in esports, a team exec said, EA and Respawn only looked at the financial calculation of the skin sales, rather than the contribution of esports to the overall ecosystem.
“Maybe the teams are not going to push the sales 20% more than what it would have been, but you know, these teams invest in our ecosystem, they do free marketing for us with them being in an esports programme’. […] Respawn and EA don’t think like that.”
It seems apparent that this failed revenue-sharing project played a part in the decision of teams like Liquid, G2 Esports, NAVI, Cloud9 and SSG to leave Apex esports entirely.
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