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If you enjoy reading this site, you might also want to check out these Think Services sites:
 Game Career Guide (for student game developers.)
 Indie Games (for independent game players/developers.)
 Finger Gaming (news, reviews, and analysis on iPhone and iPod Touch games.)
 GamerBytes (for the latest console digital download news.)
 Worlds In Motion (discussing the business of online worlds.)
 Game Set Watch (the Group's alt.game weblog.) |
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Sony, Activision Skeptical Of In-Game Ad Potential
by David Jenkins
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January 30, 2008
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Sony Group CEO Howard Stringer and Activision Blizzard CEO Bobby Kotick have both voiced their skepticism over the potential growth prospects for in-game advertising, in a new joint interview at the World Economic Forum in Davos, Switzerland.
Speaking to British newspaper the Financial Times, Stringer commented that “The [supposed] solution to everything at the moment in the digital space is ad-supported. While advertisers are happy to talk that up, there is a limit to the amount of money available.”
Although he admitted that business models were rapidly changing Stringer insisted that “young people don't like advertising very much”. Apparently agreeing with Stringer’s comments, Kotick commented: “It's early days. I wouldn't go in that direction myself."
In the same report, NBC Universal CEO Jeff Zucker also expressed skepticism over the business model for mobile advertising, with the influential executives all apparently wary over the slow acceptance of digital advertising.
Digital marketing agency CEO Nigel Morris agreed that while consumers were used to television advertising, they had still to adjust to new marketing methods, with mobile, video game and social network advertising still being seen as “intrusive”.
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As I have commented in my blog @ http://ronin.kybernesis.com/index.php/2008/01/30/in-game-advertisement
.... translating...
"If we shove this slop down their throats long enough and tell them it tastes good, eventually they'll start to think it tastes good. Let's raise a society of youths who are willing to be smothered in 90% advertisement and 10% gameplay"
I don't know if big companies are even talking about 'free to play' yet (with the recent exception of Battlefield: Heroes supposedly going the ad/microtransaction route). It's mostly the smaller companies (that just want any form of revenue) that are seeking out these new models.
To use the universal example: Coca Cola. How much would Coke put up to advertise in your game? Is that amount worth it to them? Will they eventually realise that it may or may not be more cost effective to continue doing what they always do than to advertise to a demographic that would generally be buying their product anyway, for even more money?
What about car manufacturers? Can all gamers afford the cars that would be advertised? Sports wear? The general idea is that gamers aren't particularly active (a generalisation, for sure). Etc.
I read your blog comment, Ronny, but it mainly dealt with the way in which in-game ads should be represented, not really their future income potential, but the points you raise are valid (must 'fit' the world and not jar the experience).
Sometimes comparing games to the film industry isn't useful. In this case it is. Most film is supported by advertising and a small percentage is delivered to us through the big screen. In that respect games will follow suit. Games actually fare much worse though because there is no equivalent to the big screen.
If you think about it there are probably about 150 movies released in theaters per year. With an average run time of 2 hours that's only 300 hours of content. With games averaging 20 hours of gameplay (many more if they're multiplayer) you're looking at a greatly reduced number of prime games that can be released and fully enjoyed. Everyone else will try for the advertising model where at least they can collect some revenue based solely on the curiosity of the gamer. Much like you might find someone watching less than stellar (or outright stupid) TV shows just because they haven't experienced them before (Jerry Springer and many Lifetime movies come to mind) you'll find people drawn to less than stellar games because there's no barrier to entry and they're different. That's not to mention the fact that there will also be a lot of quality free content.
At the end of the day the advertising model is like a "middle class" model, more people will be able to share in the wealth. That doesn't mean just developers either. The players and advertisers will also be benefiting from the model.
Obviously, Stringer and Kotick are not part of the game development "middle class." They are skeptical because this new model means sharing. When you're making $150 million a month on WOW the last thing you want to think about is gamers possibly getting a similar experience for free.