Did Electronic Arts (NASDAQ:EA) just cross the line by rolling out in-game video ads in its first-person shooter Battlefield 4? Irate gamers on social media certainly think so, with Twitter and Reddit users calling the ads "pathetic," "unbelievable," and "why everyone hates" EA.
Much of the negative backlash was exacerbated by the fact that Battlefield 4 has been marred with technical problems since its release across multiple platforms last October and November. Single-player campaign save files were corrupted, gamers couldn't connect to online matches, online stats were reset, and the game frequently crashed.
All of these problems have already taken a toll on sales of Battlefield 4, which has only sold 8.8 million copies worldwide, a steep decline from Battlefield 3, which sold 16.5 million copies. By comparison, Battlefield 4's closest competitor, Activision Blizzard's (NASDAQ: ATVI) Call of Duty: Ghosts, has hit nearly 20 million copies.
Battlefield 4 developer DICE tried to contain the damage by releasing several patches and launching Battlefield Appreciation Month in February, giving players free Battlepacks (weapons, upgrades, and other items) every day of the month.
Yet despite DICE's best efforts, many gamers still consider Battlefield 4 a disaster that demonstrates how EA can ruin promising games by rushing them into a holiday release. To add insult to injury, EA also released the game's first DLC, China Rising, in December -- long before addressing many of the bugs in the main game with subsequent patches.
Were the Need for Speed ads clever or foolish?
From a business perspective, inserting in-game video ads into a game that already has so many unhappy customers can be considered incredibly clever or hopelessly foolish.
On one hand, in-game ads have been common in video games for decades. In the NES era, companies would make entire games, such as Domino Pizza's (NYSE: DPZ) Yo! Noid, to advertise their products. Later on, advertising would be frequently seen in billboards or in-game items. The in-game advertising (IGA) industry is also growing rapidly, from $699 million in 2009 to an estimated $1 billion by the end of this year.
However, video ads are generally associated with free-to-play games, and not triple A titles like Battlefield 4, which costs between $60 and $110 (depending on the version). Since video ads don't blend in with the gameplay and are negatively associated with free-to-play games, they tend to upset gamers who are already dismayed by the game's persistent bugs.
On the other hand, there's also a lot riding on Disney/Dreamworks' Need for Speed, the new racing film based on EA's hit racing franchise. Need for Speed hits theaters on March 14, starring Breaking Bad's Aaron Paul as wrongfully imprisoned street racer Tobey Marshall.
EA is likely weighing two factors. First, Need for Speed could launch a new franchise to rival Comcast (NASDAQ: CMCSA)/Universal's The Fast & the Furious, which grossed $2.38 billion over the first six films. Second, sales of Need for Speed games have been slumping -- the newest title, NFS: Rivals (2013), only sold 2.4 million copies, compared to the sales of 4.4 million copies for its predecessor, NFS: Most Wanted-A Criterion Game (2012-2013).
Since Battlefield 4 was EA's second best-selling title in 2013 after FIFA 14, it's a natural platform to promote a film that could revive one of the company's flagship franchises. EA clearly thought that the risk of alienating a few gamers was a fair trade for promoting the film to nearly 9 million gamers.
EA's public relations problems
If Activision Blizzard, Ubisoft (NASDAQOTH:UBSFF), and Nintendo (NASDAQOTH:NTDOY) inserted a few video game ads into their games, I doubt that the backlash would have been as severe as the one against EA.
Unfortunately, EA has major PR problems. The company was infamously named the "Worst Company in America" in 2012 and 2013 by Consumerist, beating out other unpopular companies such as Bank of America, Comcast, AT&T, and Ticketmaster. Activision, Ubisoft, and Nintendo weren't mentioned.
EA's reputation for rushed games, botched game launches (SimCity), sequels that were nearly identical to their predecessors (FIFA 13), poor technical support, and an excess of DLCs and in-game microtransactions have made the company a popular target for dismayed gamers.
Last year, EA's Chief Operating Officer Peter Moore issued an apologetic statement titled "We Can Do Better," admitting that the company had "made plenty of mistakes" with server shutdowns, games that "didn't meet expectations," and "missteps on new pricing models." Later that year, former EA Sports chief Andrew Wilson took over as CEO and optimistically declared that EA would become the "World's Greatest Games Company." Unfortunately, the company's issues with Battlefield 4 merely confirm that many of the company's quality control problems remain unresolved.
In closing, adding in-game video ads to Battlefield 4 might have been a wise business decision, but it also highlights EA's biggest problem -- that it is terrible at masking the fact that it is a large corporation.
Whereas Activision CEO Bobby Kotick once stated that he wanted to take "all the fun out of making video games," EA has taken the fun out of playing them with these aforementioned problems. Taking a bold step like adding in-game video ads to a premium title requires a lot of accumulated goodwill with customers -- something that EA sorely lacks.
What do you think, fellow gamers? Did EA go to far by adding in-game video ads to an already troubled game? Please share your thoughts in the comments section below!
Leo Sun owns shares of Walt Disney. The Motley Fool recommends Activision Blizzard, Bank of America, Twitter, and Walt Disney. The Motley Fool owns shares of Activision Blizzard, Bank of America, and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.