Invasion of the video game ads

You're deep in an online game, storming through a gritty urban landscape. The enemy? A gang of brawling thugs armed with baseball bats. You battle furiously, take out the last villain, and look up in triumph. And the first thing your eyes light upon is a billboard hawking Starbucks.

Take note if your favorite online game has billboards, banners, and other signage sprinkled around the landscape. Although some games already contain real ads, many still have signs promoting imaginary companies or services. But that may not last much longer -- two online ad networks, the type of company that dreamed up banner ads for Web sites, promise to pump games full of ads for cable TV shows, soft drinks, technology products -- you name it.

"There are more ads in games than you might think," says Michael Goodman, an entertainment media analyst with The Yankee Group. For example, boxed games like Tony Hawk's Underground 2 and pay-for online games such as PlanetSide come to mind. But Goodman says these online ad networks, which are still in their infancy, promise to bring ads to every online gaming street corner. They will multiply the number of ads both in online games and in games connected to the Internet through a console by dynamically plugging ads directly into games and also by playing video ads while a game loads.

Massive and InGamePartners will soon be plugging dynamic real-time ads into both online games and games connected to the Internet through Microsoft Xbox, Sony PlayStation 2, and Nintendo GameCube consoles. Online gaming is big business, of course: The Entertainment Software Association estimates that between 50 and 60 million Americans play online games.

Massive's network serves video game companies Vivendi Universal Games (Half-Life2, among many others), UbiSoft Entertainment (the Myst series), and Legacy Interactive (Real Life Games and games based on the TV show Law and Order).

InGamePartners provides ads from businesses like General Electric and Spike TV to online gaming companies Phoenix Connexxion (FragFest Chicago and Imagination Cubed) and GriffinRUN, a game server hosting company.

Consumer reaction

How do consumers feel about the push to fill their games with ads? According to a 2004 study released by Nielsen Entertainment and video game company Activision, pretty good. The study claims that 35 percent of male gamers say in-game ads help them decide which product to buy, and that over 50 percent of "heavy gamers" liked having real ads in the games.

"I don't think gamers are going to mind the ads...kids want more reality in their games," says Richard Skeen, Massive's vice president of advertising sales.

But not every gamer believes the ads lend credibility.

"I find it shameless. I hate it," says Alan Dolan, 28, a broadcast designer and an active gamer. "You don't want to live in reality when you're playing a video game," he says.

A new source of revenue

According to The Yankee Group's Goodman, gamers have only seen limited ads in boxed video games because those games' lengthy production timeline can make the ads obsolete by the time a user sees them.

But online game makers may be receptive to the additional revenue ads offer because their games become less lucrative as the cost of production increases. And to keep a game competitive, frequent changes and updates need to be made. The ad networks offer a fix for this financial pinch, and reach gamers in a timely, effective manner, Goodman says. However, the networks can't reach those who play offline.

Danger, danger: Intrusion

Still, it takes more than a network to generate effective advertisements.

"What we've learned through various studies and just being gamers ourselves is that gamers didn't like to leave the game," says Darren Herman, CEO of InGamePartners. "The issue is, how many market placements can you put in a game without corrupting the game?"

And Jason Della Rocca, program director for the International Game Developers Association, says the ads must be realistic to work.

"If I'm playing a Star Wars game, and there's a McDonald's or Starbucks in Tatooine...that really doesn't help," says Della Rocca.

Representatives from Massive and InGamePartners insist that innovative methods like playing video ads while games are loading or having a game character use a brand name product can avoid interrupting gamers.

"This is not at all anything like a pop-up ad," says Amy Janzen, a spokesperson for Massive. But Della Rocca cautions that even playing ads during load time might cause problems. Think about how much you enjoy pre-movie ads when you play a rented DVD. "I think (load-time ads could) be pretty disruptive," he says.

Problematic games

For gamers looking to avoid ads, the two best bets may be console games not hooked up to the Internet and all types of fantasy games. The networks reach only online games, leaving games played unconnected out of their grasp -- although some games may still contain static ads.

Similarly, because fantasy games like Halo and Doom don't resemble real life, it is difficult to put unobtrusive ads in them. Their other-worldly landscapes make it harder to drop ads in. After all, where would you place an ad? On the side of the U.S.S. Enterprise shooting through the galaxy or on a dragon's wing as it soars overhead? Given the popularity of the Lord of the Rings movies, perhaps even Frodo's cloak could become a target in the future.

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