Video Games as Advertisers' Haven (DRAFT)

Many believe advertisement bombardment in media will grow to a point that ad-evading measures taken by audiences will end advertising altogether. The truth, however, is that as long as product manufacturers are willing to invest money to get products in front of new eyes, advertising in media will remain. (FN1). What will change is the significance of the actual ad to all parties involved -- manufacturer, content provider, and listener. Product manufacturers of yore concentrated on producing a good product, hoping for endorsement by a content provider that attracted many eyes. The product manufacturer is gaining power, however, as his advertising dollars are valued by any content provider that can get them. Content providers are increasingly dependent upon the ad and it’s revenues to produce and capture eyes. For the consumer, the role of the ad is changing from simply a device to inform the consumer of new/useful/ products to consider, to a necessary consequence -- evil or good -- of receiving content. These trends will continue to solidify the place of advertising in our media.

The video game industry is an interesting and fairly novel market with a growing dependency on/utilization of ad- and product placement. In any media source, there is a certain annoyance bar that advertisements must surpass before the people stop coming. The bar is especially high in the gaming realm where there is a split in the audience as to whether ads are welcome or simply interruptive. Many welcome advertisements in genres such as sports and racing games, in which an ad-filled environment in the video game (however unfortunately) mirrors that of the real life environment being mimicked. Others are wary that advertisements will grow to interrupt gameplay. Players don't want to have to wait for Lara Croft to finish her Coke before continuing the next mission in Tomb Raider; however, some will love the presence of commercials in their Superbowl game in John Madden Football. The latter exemplifies how advertisers have created a society that provides a positive feedback mechanism for games.

As in other media, where it all goes will ultimately depend on how the audience, gamers, react, and subsequently how advertisers and content providers re-react. Gamers may react as have internet users, developing softwares or similar mechanisms to block unwanted ads. The video game, however, is to a higher extent a black box to current users than are the computer and the internet. Further, companies such as Microsoft are depending upon the failure of any end-user efforts to evade ads in their games. In May, 2006, Microsoft purchased Massive, Inc., a 60-employee video game advertising company with $7 million in per annum income, for an estimated $200 million. (FN2). Microsoft has gotten in on the ground floor of video game advertising, realizing that product manufacturer ad money is a resource that will never tap out.

Microsoft need not worry about user threats to this investment, however. Advertisement bombardment is becoming the status quo. Users will increasingly become inured to such bombardment in any media or other input that they receive. A video game manufacturer's purchasing an advertising company for $200 million likewise indicates that a drop in video game prices is nowhere in site. The status quo includes a lower (if any) user expectation of receiving any benefit as a result of being subjected to ads -- even lower for those who like ads for realism. The NetZero? /RoadRunner business model, as applied broadly, has instead changed the general expectation from "pay less for an ad-filled media" to "pay more to get these ads out of my face." (FN3).

Advertisement has become, and will remain, the default. And in this unique context of gaming, audience members are already paying $60 per game. The 2008 version of the Madden game was the first in which EA Sports allowed updateable advertisements, yet the game outpriced and outsold its' predecessors (with users broadly agreeing that the ads were about the only thing updated since the last version). As with any business, the name of the game is the bottom line; why drop the price? (FN4)

Video game media providers also have the advantage of the "only game in town" aspect of each unique game. Players of popular titles such as Halo will not stop playing simply because the vehicles don Pontiac branding, or because loading times are extended to fit GM commercials, especially not where their life outside of the game is already a constant bombardment of ads. (FN5). Advertisers and game manufacturers will thus have increasingly unchecked power to throw ads at gamers. As gamers have no way out, advertisers will do this to the extent that the game is still playable -- an assessment that, as made by the advertisers and revenue-collecting game manufacturers, will probably include slightly more ads than gamers would consider "still playable." Another possible consequence is a market flood of ad friendly games: in other words, more football and reality games in which users welcome advertisements, and less games in which advertisements would be solely interruptive or obvious impediments/annoyances to gameplay. The unfortunate result would be the advertisers directing the content (especially unfortunate and simply weird in gaming).

The conclusion of this ordeal will ultimately depend on which side takes the reigns in affecting change. The listeners may stand up in various ways -- developing technology and other means to dodge advertisements until they are no longer cost effective for the advertiser. To the contrary, content providers, dependent upon advertiser income, may do just as they have done in other media -- find new ways to get around these technologies to keep the audience's eyes on the cash-producing prize. The conclusion will most likely be this constant race. The end of it is audience against content provider and advertiser. Society's demand for new content will never decrease, as won't content-providers' desire to line their pockets with the perpetual surplusage of advertising dollars. Our coexistence will therefore be that race.

FN1: This is not to say that advertising is needed to have any content at all, but instead, to make the point that there will never e a shortage of content to put these advertising dollars to use.

FN2: See also AdverGame? at www.advergame.com; and Unicast at www.unicast.com

FN3: The Earthlink/PeoplePC/NetZero Model: a business (1) offers content for free; (2) recruits advertising revenue based on the eyes it has captured; (3) offers users the same service, without the ads that the service now has, for a price.

FN4: EA Representative Shelby Cox: “EA is committed to providing both great entertainment experiences for gamers and effective advertising solutions for brands and marketers. Massive has proven its ability to deliver relevant ads in a seamless, nondisruptive way that enhances the realism of the game environment.” at http://arstechnica.com/journals/thumbs.ars/2007/07/25/ea-and-microsoft-launch-dynamic-in-game-advertising-system. Committed to providing advertising solutions for brands and marketers, NOT to giving the gamer a break.

FN5: A player of EA Sports’ Fight Night boxing game: “Terrific game. Worth buying, not just renting. 5 stars for the game, 1 off for taking advantage of me as a fan and customer. I should really ding it harder for that, but the game is too fun to let something sort of sleazy take away from it.” Another player: “I would almost pay extra money for some sort of a cheat code / hack to replace all of those ads with blank space. Maybe they'll let me download that from XBox Live in the near future.” From reviews at http://www.amazon.com/Electronic-Arts-15173-Fight-Night/dp/B000CRSBLQ.

Other - http://www.gamespot.com/news/6148363.html : In-game advertising is clearly poised to grow in the coming years, but there's debate over just how rapid that growth will be. Earlier this month, Massive's own CEO pegged the market at $1.8 billion by the end of the decade, while the managing director of The Wall Street Transcript showed even more enthusiasm in January by projecting the market to reach $4 billion by the end of 2008. - EA claims that Madden took 20 Million to produce, yet fans everywhere agree that it is the same game as last year with an updated roster.