Advertising, already ubiquitous in movies and on television, took a step into video games on Monday as Massive Inc. launched a network to place and serve ads within games.
Massive said brand names like Coke, Paramount and Intel were already on board, with 40 games set to offer advertisements from Massive's network on in-game virtual billboards and shop windows by the end of the year. The company has been in "beta" testing on its network since last year.
As the key audience of men ages 18 to 34 increasingly embraces video games as a preferred entertainment medium, at the expense of traditional forms such as television, advertisers are looking at games as an attractive way to reach that high-spending demographic.
For game publishers, there is relatively little work to do to make space for ads in a game and plenty of reason to do it -- Massive said early returns showed publishers were earning up to $2 on each copy of a game sold with ads from their network.
Massive's ads appear in games like "Anarchy Online" and the new "Splinter Cell Chaos Theory," in many of the places an ad would be seen in real life -- on billboards, shop windows, the sides of buses and the like.
Ten publishers have signed on with Massive, Chief Executive Mitch Davis said, including Take-Two Interactive Software Inc. and Ubi Soft. By the end of this year, Davis said, 40 games will incorporate the network.
Besides Coke, Paramount and Intel, other major brands appearing in ads on the network include Nestle, Honda, T-Mobile and Dunkin' Donuts.
In a research note last month, Harris Nesbitt analyst Edward Williams suggested the market for dynamic in-game ads could be in the "hundreds of millions to even billions of dollars annually," with the potential for sharp growth rates.
But Williams also suggested there were significant hurdles -- not the least of which was ensuring advertising did not dominate game-play.
"How companies generate incremental revenues through ads will be critical to the consumer's willingness to put up with it. In other words, a successful campaign will blend in with the rest of the game -- maybe even add to the realism of the product," he said.