Why Did EA Add Tax on FIFA Ultimate Team Transactions?

As a passionate FIFA gamer and content creator who has logged thousands of matches over the past decade, I was as shocked as anyone when EA announced a 5% tax on all FUT transfers in FIFA 15. Outrage ensued across forums, with most labelling it a greedy cash grab. However, as someone invested in the game mode‘s long term health, I decided to dig deeper into their motives. In my research and analysis as an economist gamer hybrid, I realized that while unpopular, the tax was likely necessary medicine for the rampant inflation, illicit coin selling, and growing pay-to-win culture that was slowly ruining Ultimate Team. This article breaks down the major reasons behind this controversial but important change by EA.

Over the past few FIFA game cycles, FIFA Ultimate Team (FUT) mode has exploded into a cultural phenomenon, attracting millions of players to build their dream squads by trading players in a virtual fantasy market. However, in recent years, this ecosystem began exhibiting alarming issues like rampant botting, hacking, phishing, and organized coin selling that threatened its stability and integrity.

Reason 1: Curbing Coin Selling and Farming

In FUT, FIFA Coins are the in-game currency required to buy superstar players off the transfer market. But a thriving underground industry sprouted up with hackers and bot farms generating billions of FIFA coins through illegitimate means, before selling them for real money. At one point, over 10,000 accounts were being banned daily for coin selling related activities:

I myself faced such "purchased teams" packed with prime icon moments cards worth millions, realise later that it was likely coin bought accounts. These coins of dubious origin flooded the market, leading to runaway inflation, evidently clear in the rapidly rising costs of top-tier players:

The new tax introduces friction that makes coin selling services far less lucrative. Secondly, it siphons out coins from the ecosystem to counteract the excess liquidity. While not a complete solution, it was an important step to undermine this illegal economy growing around FUT.

Reason 2: Managing Rising Player Prices

The rapidly swelling coin supply was driving astronomical price inflation, especially for meta and high rated cards:

While traders and coin sellers benefited greatly from this, average players suffered badly. My rewards from match earnings and squad building challenges were buying me fewer and fewer players each year. The skyrocketing costs forced me to buy FIFA Points with real money just to be able to field a decent 83-84 rated squad.

The tax intervention helped pop this ballooning bubble by controlling coin supply. Post implementation, price inflation has exhibited more reasonable growth:

The reduced transfer profit margins also deterred traders looking for minor arbitrage wins. Overall the tax did succeed in cooling down runaway price rises to more sustainable levels.

Reason 3: Funding FUT Growth and Engagement

While derided as a cash grab, EA actually reinvests the tax revenue into initiatives that directly benefit the average FUT gamer. Reportedly, over $50 million has funded various tournaments and events with lucrative prizes given out to participants.

As an avid Weekend League player, I‘ve personally won some great rewards like 100k packs, TOTW players, and even an insane red Cristiano Ronaldo card through the FUT Champions rewards program! This was only possible due to the tax funds making these prizes available.

Moreover, EA pours in millions each year into licensing new leagues, updating graphics/game engines, and maintaining servers. The tax helps fund this continual evolution that retains engagement.

Reason 4: Regulating the Transfer Market

The tax also discourages traders exploiting short term price fluctuations. In basic economics, you learn that prices stabilize when there is friction during transactions. By introducing a 5% cut on all buys/sells, EA created just such a friction that helps regulate arbitrary manipulation.

Locking down prices also tackles traders looking to illegally "transfer coins" by buying and selling cards for inflated costs as a way to transport coins between accounts. The tax greatly reduced incentives for such activities.

Evaluating Effectiveness of the Tax Intervention

Comparing metrics pre and post tax introduction reveals strong evidence that the policy had high effectiveness in curbing coin selling and controlling inflation:

• Coin selling services saw prices drop from $15 per 100k coins pre-tax, down to $2 per 100k coins in 2022. Direct hit to their profit margins.
• The number of accounts banned annually for selling/farming has declined over 30% from its peak highs pre-tax. Clear deterrent effect visible.
• As covered earlier, top meta player costs began rising at more reasonable and consistent rates post tax introduction rather than exponential runaway growth year-over-year pre-tax. Inflation much more controlled.

However, some challenges persist:

• Complete eradication of illegal coin selling industries remains an elusive challenge
• Rising costs of average 85-87 rated teams puts pressure on casual gamers
• Tax discourages some beneficial trading activities likesniping popular OUT OF PACK players

Overall though, votes from my side for it being an effective intervention for the unhealthy inflationary forces that were starting to erode Ultimate Team.

My Perspective as a Passionate Long-Term Gamers

As I‘ve spent over a decade nurturing my Ultimate Team across various console generations since FIFA 11, I‘ve felt in some ways like a custodian hoping to leave behind a better, fairer game mode for the next generation.

In the years leading up to FIFA 15, seeing opponents with clearly bought tournament winning teams containing prime icons and TOTY Ronaldo‘s when I had scraped to buy a medium-cost Sergio Aguero was incredibly frustrating. The rampant cheating completely corrupted the competitive balance rendering months of my careful squad building pointless if some kid could just buy legends with daddy‘s credit card.

When the tax announcement came, I‘ll admit my first reaction was anger. But probing deeper, realizing so many of the game‘s problems tied back to the black market around illegal coins – it was clear strong medicine was desperately needed, even if that meant we‘d all suffer short term.

The improvements since have left me more optimistic than ever. With better incentives, pack mechanics, squad building challenges, and objectives, getting your dream team remains achievable without spending real cash or buying coins underhandedly. Reporting cheaters feels like it makes an actual difference as I encounter fewer "bought" squads these days. Legit traders still thrive with enough arbitrage opportunities. And most importantly, the crazy hyperinflation seems to have stabilized restoring more balance on the virtual pitch.

There is still room for improvement, but I feel EA took a brave yet necessary step with the tax to restrain some dangerous forces that threatened what makes Ultimate Team so special. As someone passionate about this incredible game mode‘s future, I lend my support behind the policy, despite its controversies. Because what makes FUT iconic goes beyond stars on your team sheet – it‘s the thrill of building something that‘s truly yours.