Industry adds ads on video games

Analysis:

This article from the Cox News Service appeared in the “Your Life” section of the Grand Rapids Press. It appears to be in part based on a Press Release sent out by one of the sources cited in the story, Parks Associates, which is based in Dallas, Texas. The only other source cited in the story is that of Massive Inc., a subsidiary of Microsoft Corp. Massive Inc. markets itself as “your channel to the Gaming audience.” Both sources cited talk favorably about the increase of ads that are appearing in video games.

In addition to the sources cited, the story gives a few examples of how advertisers are working their ads into video games. Advertisers cited are Wrigley gum, the Discovery Channel and Burger King. While the story speaks positively about the increase of ads in video games and it’s relationship to gaming systems, there are no perspectives from people or organizations who are critical of this trend.

Story:

Gamers, get ready: Like it or not, advertising in video games is about to move to the next level.

Last year, advertisers spent $370 million placing their logos on billboards in virtual driving games, running ads on online gaming sites or reaching out to gamers in other ways.

Within five years, they’ll spend a dizzying $2 billion, Dallas-based technology research firm Parks Associates predicts.

“It’s definitely becoming a more established model for advertisers,” Yuanzhe Cai, the firm’s director of broadband and gaming, said. “How many more 30-second spots can you put on a TV show?”

As the $12.5 billion gaming industry opens its E3 Media & Business Summit in Santa Monica, Calif., today, advertising is likely to get as much attention as avatars and animation.

Along with becoming more commonplace, the ads are becoming more intriguing and integral to game play.

Yesterday’s in-game ads consisted of simple billboards pitching Dell computers or Nike shoes at a virtual ballpark. But tomorrow’s are likely to include video trailers for upcoming movies, virtual vending machines that dispense extra energy along with every Coke, and computer-generated Cadillacs or Nissans that players can win and use in racing games.

And then there are specialty “adver-games.” Last year, as part of a restaurant promotion, Burger King sold a series of goofy games for Xbox featuring its big-headed royal icon. The games, with names such as “Sneak King” and “Pocketbike Racer,” sold out and quickly became collector items.

Similarly, candy and gum maker Wrigley in February began offering free downloadable games exclusively for Nintendo Co.’s Wii console. Not surprisingly, the games come with names such as “The Great Flying Mintini,” which will be presented by Altoids, “Horse,” sponsored by Big Red, and “Out of Bounds,” brought to you by Juicy Fruit.

“Advertisers are all very excited,” said Cory Van Arsdale, CEO of Massive Inc., a Microsoft Corp. subsidiary that sells and develops ads exclusively for video games. “Business is very promising.”

Depending on complexity and reach, a video game advertising campaign can cost between $10,000 and $1 million, Van Arsdale said.

A game developer’s potential cut could be as much as $3 on every game it sells, he said.

Of course, just as too many commercials can turn viewers away from a TV show, too many in-game ads can turn away gamers.

Given the revenue potential, though, even game developers that previously shied away from selling ads in their games are starting to sell them.

Austin-based NCsoft North America, for instance, is planning for the first time to sell and insert ads into its popular online multiplayer games such as “Lineage,” “Guild Wars” and “City of Heroes,” as well as into its forthcoming fantasy game “Tabula Rasa.”

“We’re really intrigued by it,” said Dorothy Ferguson, NCsoft North America’s vice president of sales and marketing. “It has the potential to increase (revenue), but it’s really also about enhancing the game-playing experience.”

Advertising in video games makes virtual worlds more realistic, Ferguson said. She said NCsoft’s games will likely include various kinds of ads, from static billboards in virtual cities to interactive challenges that can let players win rewards.

In a recent — perhaps telltale — advertising campaign, Discovery Channel started advertising its TV shows across all sorts of media. One of its more successful ad campaigns recently was a tie-in with the “Gears of War” game on Xbox 360 that began in January. “Gears of War” players can download special maps to navigate virtual battlefields. When they do, they also get an ad for Discovery Channel’s “Future Weapons” TV program.

Discovery Channel “got a really positive response,” said Van Arsdale, whose company handled the campaign.

Text from the original article ommitted from the Grand Rapids Press version:

In one of the biggest commitments to video game advertising, carmaker Nissan Motor Co. last November inked a far-reaching agreement with Microsoft to put ads on Xbox and PC games, as well as on its mobile and handheld computer platforms. As part of the deal, Nissan became the official sponsor of Xbox’s popular “Forza Motorsport 2” racing game and also sponsored a global online tournament tied to the game.

Especially with its $200 million-plus purchase of Massive last year, Microsoft has been among the most aggressive of game and console makers when it comes to advertising.

But rival Sony Corp. is taking steps to catch up.

This month, Sony announced it was working with media measurer Nielsen Co. to develop new ways to track and collect data about users of its PlayStation 3 game console.

The underlying reason: To figure out how to sell more advertising in PlayStation 3 games and on its PlayStation online network.