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October 03, 2006
In-game advertising: ready for prime time?
Video gaming is slowly but surely growing into an activity that cannot be ignored. Even Washington lawmakers are taking note of this phenomenon that is sweeping families throughout the United States, with assertions about how video game violence could influence violent behavior in real life. Meanwhile, having long outgrown its traditional young male demographic, video games now command the attention of nearly half the population of 35 to 54-year old women, who play video games with their children. All these are favorable indicators for a play that can yield major returns if executed well: in-game advertising.
The in-game advertising industry is projected to reach more than $400 million by 2009. There are a number of reasons advertisers may want to sit up and take notice of this advertising medium. Video games are no longer computer programs running on isolated devices. Many of the most popular games today, World of Warcraft, Final Fantasy and Second Life are played in hosted, online environments. Being linked with a gamer's experience so intimately provides plenty of opportunities to throw in advertising. Advertising in games may also stand a chance of actually being noticed, because it has a better shot at integrating with, and indeed, appearing as content. Generation Y expects high standards in marketing messages targeted at its members. These messages have to be distinctive and engaging. How much more engaging would an apparel ad be in the context of dressing up a video game character, than as a TV ad that might well be skipped over during a time-delayed viewing?
Currently, Microsoft is the only online advertising player that also has its fingers in the gaming pie. If the XBox Live and MSN teams aren't talking, they might want to look each other up soon. The highly successful online experience offered by XBox Live is something Microsoft has on its competitors in new-media advertising, and can exploit to great profit. Google (or the more media-savvy Yahoo) might still gain by linking up with video game industry players like Sony and Nintendo, whose next-generation consoles, the PS3 and Wii respectively, will debut at the end of this year.
In-game advertisers would also do well to consider the mobile angle to their advertising strategies. Multiplayer mobile gaming is on the uptick, especially with devices like the PSP/mylo and Nintendo DS Lite entering the market. If Microsoft's Zune doesn't do well as a media player, it might make sense to reposition it as a personal gaming console—the four way button can be largely grandfathered into a gaming function. In-game advertising for these consoles can be trickier because they are not connected constantly to a network. This obstacle can still be overcome by skinning a video game with a particular brand, or by downloading a cache of in-game ads on to the device when connectivity is available.
In-game advertising networks like Rivals Massive, Inc. and inGamePartners have been around for some time now, but major new-media advertising networks have yet to leverage their expertise via meaningful link-ups. In-game advertising is still far from attaining the glory lavished on online advertising, but this is exactly when media players might want to start thinking about how they will get their game on.
| Strengths | Weaknesses |
|---|---|
| In-game advertising can be very engaging if done well, and stands a much better chance of integrating with true content. | The true impact of in-game ads may be hard to quantify because responding to in-game ad content can sometimes detract from actual game playing. |
| Opportunities | Threats |
| Next generation game consoles, in both handheld and stationary form, are about to hit the market. Moreover, the gaming demographic is a lot wider than it used to be. | Game publishers may view collaborating with in-game ad networks as a compromise of their game's artistic integrity. |
Posted by Vishy at October 3, 2006 10:57 PM