In its latest round of reductions, in-game advertising firm IGA Worldwide has laid off less than a quarter of its 22 employees as the company shifts its priorities to other unspecified opportunities.
The NYC-headquartered company hasn't said whether this shift is due to a weakening in the market for in-game advertisements, but co-founder and chairman Justin Townsend tells Gamasutra that the company will reveal more details on its new strategy to the public in about a week.
IGA Worldwide provides ads from a variety of brands to be featured in the games of partner publishers like Activision, Codemasters, and Atari. Since establishing in 2005, the firm has raised over $47 million from investors, including an unspecified amount from a new round in August 2010.
Independent in-game advertising companies have faced a number of challenges in recent years, such as major publishers like Electronic Arts opting to handle sales of ads in-house
, and Microsoft shutting down its Massive division after acquiring the network for $200 to $400 million several years prior.
In November 2008, IGA Worldwide laid off 25 percent of its staff due to a general downturn in advertising budgets. The agency was also forced to develop a new business model after its strategy of offering guaranteed payments in exchange for ad rights in games became no longer viable.
Despite those troubles, when the company's European VP and co-founder Ed Bartlett resigned in November 2010
, he predicted a resurgence in the advertising market, and said IGA Worldwide was "extremely well placed to capitalize on renewed industry confidence and market growth".
At its height in 2008, the firm employed some 70 workers, integrating dynamic ads for games on PCs, web, and consoles. Reportedly that number was closer to 22 prior to these latest cuts.
Since last year, IGA Worldwide has focused more on delivering ads in social games than in traditional console games.