In-Game Advertising, The Next Biggest Gold Mine in Town!

India has a history of the kind of mentality that suggests “playing games” as a realm of “kids only”. I still remember the times when I used to review games for one of the leading technology magazines in the country. My folks used to wonder what kind of company would care to pay me for playing games. Even today, when I spend hours playing DotA online, I get frowned upon.

I am sure, such a story ain’t too uncommon in most of the households. However, how do you make people believe that the average age of today’s Indian gamer is 28 years and 61% of all console players are above 18 years of age? (Stats Source : Express Computer Online) This is hardly the age that one might call adolescence. Rather, this is the age that actually influences a family’s purchases and is also a young, bachelor bread winner who does not mind splurging a few extra bucks on branded consumer goods. So, it comes as no rocket science that today’s brands and advertising agencies are eyeing the video gaming industry is the latest prospective arena for advertising and increasing brand awareness.

The usage of computer and video games as a medium to deliver advertising isn’t too new a concept, though. One of the first such advertisements was implemented in a 1978 computer game called AdventureLand. A game called Zool had also designed a whole new set of levels in a “Sweet World”, showcasing various candies by Chupa Chups, a Spanish lollipop company. In 2005, 56 million US Dollars got invested on in-game advertising, a figure that is expected to rise up to 1.8 billion US Dollars by 2010.

With purchase prices of popular computer games like World of WarCraft (Rs 2,749) and Crysis (Rs 2,349) threatening to hit the roof, increased sponsorship for such games just might translate into a little landslide in those prices. Well, for the hardcore enthusiasts, such prices just might sound pretty cheap but have you ever stopped and wondered how many games you must have actually played, till date? Now try translating the cost prices of all of them and then one might start wondering how much those games would have cost us if we bought each and every one of them. (Yes, I admit even I have played pirated versions of quite a few of them.) Moreover, how many parents would ever buy a “video game” for their kids that cost 2 grand upwards, each? What adds to the woe is the fact that fast, reliable and cheap internet connectivity, with unlimited data plans (phew!) is still a luxury in most Indian homes. With so many conditions to fulfill, true MMO gaming is still a boon for the blessed.

IndianTelevision comes up with a very good analysis of the current position and interest of in-game advertising as process of building brand awareness and explores on various methodologies used by today’s advertising agencies to advertise within the games. Today, it is possible to analyze the effectiveness of every single piece of advertisement that an agency puts, with the help of various algorithms drafted into games. I remember, once, hearing about a few advertising hoardings that are equipped with CCTV cameras. The purpose of such an arrangement is for the advertiser to figure out how effective a certain hoarding is, how many people actually look at it and how much time they spend at it. All these analytics help them in designing better ads and placements. Companies like Massive, a subsidiary of Microsoft, have developed powerful algorithms that use the internet connection to transfer data back to the agencies, telling them about the gamer’s state of mind, amount of time spent on the current level, the kind of accessories a gamer uses, the time of the day and many more. A number of games also use billboard-like advertisements and blatant product placements to create a more life-like, realistic environment. Virtual Worlds and MMORPGs like Second Life and Sim City have been immortalized by introducing concepts like virtual real estate which gives brands a more constant in-game presence. A little example would be the Starwoods Hotels & Resorts that established an aloft hotel in Second Life. The beauty, here, is that the real world hotel is yet to open but an early preview to the gamers provide the designers with early feedback from prospective guests and also, in turn, help in building awareness for the same.

Have you ever read about new destinations and new cuisines in novels and then actually trying them out in real life while making a comparison of the actual feeling with the image that you had in mind? Video games also opens up huge doors to travels and tourism wherein states and countries and ask the developers to create scenarios based in certain locations. This, not only, helps in improving the game play by making it more realistic, it also creates interest in the gamer’s psyche and might, in turn, help in boosting sales too. I am sure no one has ever thought about boosting up travels and tourism revenue with the help of in-game advertising, what say?

Reaction to in-game advertising from the industry has generally been positive. With more people chucking the idiot box in favor for the intelligent one (read: internet-enabled devices),  it makes more sense to gradually make a foray into new media. Moreover, integrating dynamic advertising into video game environments gives brands a measured lift in consumer awareness and opinion of the products players see during game play.

Reuters in Second LifeAccording to Gamasutra, around 82% of consumers feel that games are almost as enjoyable with properly targeted advertisements as without. The keyword here is ‘contextual’. (I guess, Google needs to be credited here for bringing the concept in vogue.) Their study also found that in-game advertising increases brand recall by about 44% and positive brand association by 33%. Over 60 percent of these most opinionated consumers feel the ads catch their attention, make games more realistic, do not interrupt the game experience, and are promoting relevant products.

The gaming industry sees in-game advertising as a very promising revenue stream. Some developers believe that the extra revenue will reduce the risk involved in a game development project, allowing them to experiment with more innovative game-play and new ideas. Publishers see this revenue stream as a way to offset growing game development costs, which are estimated to rise up to $20 million per title for a 7th generation console. Today, a lot of gaming titles get released in many parts of the world, with a few localized releases too. The flexibility of dynamic advertising only increases the scope to fit for any demographic.

4 Responses to “In-Game Advertising, The Next Biggest Gold Mine in Town!”

  1. September 1, 2008 at 5:09 pm #

    damn cool round up Shay .. the data on the player’s demographics though not entire unexpected to me, it still seems odd that people that old would carry on with serious gaming..especially in India

    I guess this means people who would make the most of this story need to be on WATGame more often :)

  2. September 2, 2008 at 9:40 am #

    Dude…

    I, myself, am a pro gamer! Had qualified for the recent Reliance Gaming Tourney from the eastern zone! Moreover, folks who have really got the skiils and a wee bit of financial security from their parents, always find the time and means to practice for the larger scene. They also double up as game reviewers, community admins or even walkthrough writers to help them sustain themselves. And of course, if you manage to win even 1 tourney, you can easily sit back and keep playing for all the rest of them, without any extra work! ;-)

    And yeah, I agree with you on this one. WATGame is the kind of platform that keeps people abreast of the latest in the gaming scenario, especially on the Indian context, and it is important to be on top of the latest hype ‘coz that’s where you can cash in most of the moolah! ;-)

  3. September 8, 2008 at 3:36 pm #

    Nice writeup! What we’ve actually seen are a number of publishers that are not only interested in implementing in-game advertising, but also furthering their revenue streams by adding microtransactions AND subscription management tools. By creating the right mix of all three, publishers are hoping to please everyone, and maximize the monetization.

  4. zach
    September 15, 2008 at 2:54 pm #

    i dont like this too much… this will influence the game developers. They will now force themselves to create scenarios that will favor the publicized company thus deviating away from the actual focus of making the game… at first they will say they will allow only one sponsor… they will gradually move to more till the whole game looks like a commercial break after the super bowl :)

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