Is Electronic Arts (NASDAQ:EA) America's "worst" company? The readers of The Consumerist certainly think so: The video game publisher won the unfortunate award two of the last three years (just barely edged out by Time Warner Cable in this year's vote).
But that could be about to change.
Earlier this month, Electronic Arts announced that it had hired a new Chief Marketing Officer: Chris Bruzzo. Prior to Electronic Arts, Bruzzo had worked for Starbucks (NASDAQ:SBUX) in various capacities, mostly centered around the coffee giant's digital marketing and brand, including serving as the Chief Marketing Officer of Seattle's Best Coffee and as a senior VP of Starbucks' channel brand management.
Given Starbuck's image, and its unprecedented customer loyalty, Bruzzo could be poised to turn Electronic Arts' reputation around. It certainly needs it -- with its business model shifting, a better image will be vital in the years ahead.
Electronic Arts' poor image is justified
Of all the major video game publishers, none may be as despised as Electronic Arts. Although it publishes many of the most well-known, and best-selling video game franchises, including Madden, Battlefield and The Sims, there's a sizable contingent of gamers that despise the company -- and for good reason.
The most recent installment of Electronic Arts' SimCity franchise, released in March 2013, required players to be connected to Electronic Arts' servers at all times -- even if they were playing the game by themselves. This alone caused controversy, as those without Internet connections were unable to play the game. However, to make matters worse, Electronic Arts' servers experienced significant problems around the game's release, rendering it unplayable even weeks after its debut. To make amends, Electronic Arts gave early adopters a free game, but the damage to Electronic Arts' reputation had been done.
Electronic Arts' Battlefield 4 was plagued with similar issues when it was released last fall, with the game suffering from severe technical glitches that led to frequent crashes. Electronic Arts' Battlefield studio, DICE, was forced to suspend work on all other projects to fix Battlefield 4's problems, and the game's sequel -- which was originally slated for a release this fall -- has been delayed.
Electronic Arts had also been criticized for its handling of digital content, and the numerous studios it has acquired over the years. Dungeon Keeper, a game Electronic Arts recently ported to mobile devices, garnered horrific reviews for its aggressive reliance on micro transactions.
The value of the Starbucks brand
Starbucks, in contrast, has a sterling reputation and nearly unmatched customer loyalty, maintaining a seemingly cult-like following. Earlier this year, research firm Brand Keys highlighted Starbucks as having some of the most loyal customers in its industry, both for its retail and its packaged coffee. Forbes ranks Starbucks' brand as one of the most valuable in the world, ahead of companies like Subway, Porsche, and Dell.
Obviously, Bruzzo alone isn't responsible for Starbucks' reputation, but he may have played a vital role. Prior to taking his current position at Electronic Arts, Bruzzo was among Starbucks' top management, in a variety of roles mostly centered on building and maintaining various brands within the Starbucks' family.
Bruzzo is credited with being instrumental in the creation of two of Starbucks' best customer-focused, digital initiatives: My Starbucks Rewards and My Starbucks Ideas. The former is a loyalty program that credits customers for Starbucks-related purchases, and encourages repeat business with giveaways. The later is a feedback aggregator, designed to improve the Starbucks experience by crowd sourcing ideas directly from its customers.
Electronic Arts' bet on subscription services
If Bruzzo can bring any of Starbucks' brand magic to Electronic Arts, it would be a major win for the publisher. The company is increasingly embracing new methods of distribution, and a positive image could be crucial to Electronic Arts' success.
Earlier this summer, Electronic Arts unveiled EA Access -- a subscription-based service that, for a flat monthly fee, allows subscribers to access a "vault" of older content and receive discounts on newer titles. Electronic Arts could certainly survive without EA Access, but a large pool of subscribers would add meaningfully to its digital revenue and encourage additional purchases of Electronic Arts' games.
From a consumer standpoint, EA Access appears to be fantastic value -- for just $5, gamers get access to five titles, some of which retail for as much as $50. But unsurprisingly, Electronic Arts' poor reputation has tainted what appears to be an indisputably good deal, attracting intense criticism from a variety of video game-centric publications. Electronic Arts is rumored to have other, similar programs in the works, including a deal with Comcast that could have it streaming its games directly to the cable providers' customers.
But the reception of these, or any other services from Electronic Arts, could remain tepid so long as the company's poor image persists. There's no guarantee Bruzzo will succeed in turning it around, but his work could prove vital to Electronic Arts' future.
Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple and Starbucks. The Motley Fool owns shares of Apple and Starbucks. 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.