UPDATE [April 27, 06]: NY Times, "Microsoft Is Said to Be Near Deal to Buy Ad Technology", Matt Richtel.
"Microsoft is close to reaching a deal to buy Massive Incorporated, which makes technology that inserts advertisements into video games, a member of Massive's board said yesterday.
The board member, Douglas P. Miscoll, a partner with the venture capital firm Newlight Associates, said the price was $200 million to $400 million, but he declined to be more specific.
He said the deal was not yet signed and that it could yet fall through. The deal "has not yet closed," Mr. Miscoll said, "but we think we're on track." He said his firm had invested around $4 million in Massive. [...]
The notion that Sony might reject ads placed by Massive "is a possibility, but it may not in fact be the way things turn out," Mr. Miscoll said. He added that Sony or others, even if they compete with Microsoft, may not be able to resist accepting Massive's advertising because 'the economics of the Massive network to the video game publishers are very compelling.'"
Wednesday, April 26, 2006
News: Microsoft to Acquire Massive
"Microsoft is said to be planning to buy in-game advertising heavyweight Massive in a deal worth $200 million to $400 million, the Wall Street Journal is reporting.
According to the Journal (paid subscription required), Microsoft expects to acquire the 80-person New York City outfit in a bid to bring the technology behind much of the ads found in video games today in-house."
-- CNet
Update: Got a copy of WSJ, here are the highlights, verbatim:
-- "Microsoft plans to announce next week an agreement to buy the New York company, said people familiar with the situation. People familiar with the matter estimated the deal to be valued at $200 to $400 million."
--"Microsoft is testing its ad-brokering system, called AdCenter, in the U.S. and several markets around the world. The software giant plans to tie its brokering service with Massive's network, said people familiar with the company's plan. Microsoft's long-term goal is to have one online service that advertisers can go to buy ads across a broad range of Microsoft products. For now the Massive network will be part of a palette of advertising offerings Microsoft salesmen will offer clients, the person said."
--"Advertisers spent about $56 million on advertisements in videogames last year, up from $34 million the prior year."
--"So far, Massive mainly delivers ads into games for personal computers, which are commonly connected to the Internet. But a bigger opportunity lies in delivering ads to systems such as Xbox 360, Sony Corp's forthcoming Playstation 3 and other consoles that account for most of the industry's sales. [...] Massive, in fact, has quietly begun delivering ads into games for the Xbox including Ubisoft's action title, "Rainbow Six Lockdown".
Robert A Guth, Nick Wingfield, "Microsoft's 'Massive' Move Into Game Ads", Wall Street Journal, April 26, 2006, p.B1
According to the Journal (paid subscription required), Microsoft expects to acquire the 80-person New York City outfit in a bid to bring the technology behind much of the ads found in video games today in-house."
-- CNet
Update: Got a copy of WSJ, here are the highlights, verbatim:
-- "Microsoft plans to announce next week an agreement to buy the New York company, said people familiar with the situation. People familiar with the matter estimated the deal to be valued at $200 to $400 million."
--"Microsoft is testing its ad-brokering system, called AdCenter, in the U.S. and several markets around the world. The software giant plans to tie its brokering service with Massive's network, said people familiar with the company's plan. Microsoft's long-term goal is to have one online service that advertisers can go to buy ads across a broad range of Microsoft products. For now the Massive network will be part of a palette of advertising offerings Microsoft salesmen will offer clients, the person said."
--"Advertisers spent about $56 million on advertisements in videogames last year, up from $34 million the prior year."
--"So far, Massive mainly delivers ads into games for personal computers, which are commonly connected to the Internet. But a bigger opportunity lies in delivering ads to systems such as Xbox 360, Sony Corp's forthcoming Playstation 3 and other consoles that account for most of the industry's sales. [...] Massive, in fact, has quietly begun delivering ads into games for the Xbox including Ubisoft's action title, "Rainbow Six Lockdown".
Robert A Guth, Nick Wingfield, "Microsoft's 'Massive' Move Into Game Ads", Wall Street Journal, April 26, 2006, p.B1
Tuesday, April 18, 2006
Data Point: In-Game Ad Market To Reach $432M by 2010
"Digital Ads Expected to Hit $23B by 2010"
Enid Burns, February 21, 2006, Clickz.com
"A new report from analyst firm Parks Associates forecasts across-the-board growth in digital media segments. New categories like in-game advertising and mobile will show the highest gains, according to the study, likely because they're starting from a lower base.
Emerging categories like rich media, in-game, and mobile advertising will show the most growth, according to the report. Internet rich-media ads are expected to experience a 31 percent compounded annual growth rate by 2010. The format will bring in an estimated $5.7 billion. In-game advertising will grow by at least 50 percent annually to $432 million. Advertising on a mobile platform is due to reach $2 billion."
Enid Burns, February 21, 2006, Clickz.com
"A new report from analyst firm Parks Associates forecasts across-the-board growth in digital media segments. New categories like in-game advertising and mobile will show the highest gains, according to the study, likely because they're starting from a lower base.
Emerging categories like rich media, in-game, and mobile advertising will show the most growth, according to the report. Internet rich-media ads are expected to experience a 31 percent compounded annual growth rate by 2010. The format will bring in an estimated $5.7 billion. In-game advertising will grow by at least 50 percent annually to $432 million. Advertising on a mobile platform is due to reach $2 billion."
News, Data: In-Game Ad Market To Reach $732M by 2010
Yankee Group Sizes the In-Game Advertising Market Opportunity; Exponential Market Growth to Reach More than $700 Million by 2010
(press release)
BOSTON--(BUSINESS WIRE)--April 17, 2006--Yankee Group today revealed that the in-game advertising market is poised for explosive growth, garnering more than five times the current market value to reach $732 million by 2010. In a highly fragmented media environment, Yankee Group finds that video games present a promising window of opportunity as a growing advertising medium.
As television advertising loses its effectiveness, advertisers must reach a largely segmented audience with discerning tastes. According to the Yankee Group DecisionNote(SM), Video Games Are the Next Frontier for Advertisers, advertisers are finding greater value and return on investments from in-game advertising. In 2005, advertisers spent approximately $56 million placing ads in video games, up from $34 million in 2004. The market shows no signs of slowing. By year-end 2006, the number of games with in-game ads will more than double. Yankee Group anticipates approximately 200 games will contain in-game advertising, representing nearly all the major video game platforms.
As the market becomes more lucrative, it will have a significant impact on the business operations of video game publishers such as Activision, Ubisoft and Electronic Arts. Although console-based in-game ad serving is dominated by independent in-game ad-serving networks today, Yankee Group predicts that Microsoft, Sony and Electronic Arts will bring in-game ad serving in-house and come to dominate this segment of the market.
"Although the in-game advertising market is still relatively untapped, its promising business model will lead to swift market development," said Yankee Group senior analyst Michael Goodman. "Effectively competing in the interactive gaming market for the video game and advertising communities requires careful attention to the intricacies of the industry."'
People (as listed in press release):
Michael Goodman, senior analyst
617-880-0317
mgoodman at yankeegroup.com
Christina Oh,
617-880-0238
coh at yankeegroup.com
(press release)
BOSTON--(BUSINESS WIRE)--April 17, 2006--Yankee Group today revealed that the in-game advertising market is poised for explosive growth, garnering more than five times the current market value to reach $732 million by 2010. In a highly fragmented media environment, Yankee Group finds that video games present a promising window of opportunity as a growing advertising medium.
As television advertising loses its effectiveness, advertisers must reach a largely segmented audience with discerning tastes. According to the Yankee Group DecisionNote(SM), Video Games Are the Next Frontier for Advertisers, advertisers are finding greater value and return on investments from in-game advertising. In 2005, advertisers spent approximately $56 million placing ads in video games, up from $34 million in 2004. The market shows no signs of slowing. By year-end 2006, the number of games with in-game ads will more than double. Yankee Group anticipates approximately 200 games will contain in-game advertising, representing nearly all the major video game platforms.
As the market becomes more lucrative, it will have a significant impact on the business operations of video game publishers such as Activision, Ubisoft and Electronic Arts. Although console-based in-game ad serving is dominated by independent in-game ad-serving networks today, Yankee Group predicts that Microsoft, Sony and Electronic Arts will bring in-game ad serving in-house and come to dominate this segment of the market.
"Although the in-game advertising market is still relatively untapped, its promising business model will lead to swift market development," said Yankee Group senior analyst Michael Goodman. "Effectively competing in the interactive gaming market for the video game and advertising communities requires careful attention to the intricacies of the industry."'
People (as listed in press release):
Michael Goodman, senior analyst
617-880-0317
mgoodman at yankeegroup.com
Christina Oh,
617-880-0238
coh at yankeegroup.com
Sunday, April 16, 2006
Ads in EA Sports Games: 1983-1993
I am writing the chapter on history of in-game advertising and decided to track down the evolution of sports games. I picked games made or published by Electronic Arts because the company has some of the most popular franchises, the games sold well, and also because these days the company seems to have a structured approach to selling ad space in their games. Below are screenshots from EA's sports games made during the two decades between 1983-2006.
Dr. J and Larry Bird Go One on One, 1983, Electronic Arts. No ads.
World Tour Golf, 1985, Electronic Arts. No ads.
Earl Weaver Baseball, 1987, Electronic Arts. No ads.
Skate or Die, 1987, Electronic Arts. Ads for fictional products.
John Madden Football, 1988, Electronic Arts. No ads in this first installment in the long and lucrative Madden series.
Kings of the Beach, Electronic Arts, 1988. House ad for EA, Kool Cola (fictional), AVP (association of volleyball professionals), Clue (?), Juan Cuervo (?). The game was released for C64, NES and DOS. Same ads appear across platforms, but are unreadable on C64.
Indianapolis 500: The Simulation, 1989, Electronic Arts. No ads.
Lakers vs. Celtics and the NBA Playoffs, 1989, Electronic Arts. No ads besides the EA Sports banner at the judges' table and NBA team names.
PGA Golf Tour, Electronic Arts, 1990. PGA Tour logo in the shop and on dialog screens. No other ads.
NHL Hockey, Electronic Arts, 1991. It is unlikely but chronologically possible that the "SHARK" board refers to the Shark energy drink. The other boards seem to be mere decorations or ads for fictional products. Two other notable 1991 sports games by EA are John Madden Football II, an upgrade of the 1988 game, and John Madden Football 92, the next installment in the franchise. Neither of them had third-party ads, judging by the screenshots.
NHLPA Hockey, Electronic Arts, 1993. House ad (EA Sports Network, EASN that reads like ESPN) on ice resurfacer. Other games that came out that year - John Madden Football 93 and two basketball games - feature house ads.
Screenshots from a few games by other publishers:
Championship Baseball, 1987, Activision/Gamestar. House ad for Gamestar.
ABC Monday Night Football, 1989, Data East. No ads.
Super Real Basketball, 1990, Sega. House ads on the court.
Dr. J and Larry Bird Go One on One, 1983, Electronic Arts. No ads.
World Tour Golf, 1985, Electronic Arts. No ads.
Earl Weaver Baseball, 1987, Electronic Arts. No ads.
Skate or Die, 1987, Electronic Arts. Ads for fictional products.
John Madden Football, 1988, Electronic Arts. No ads in this first installment in the long and lucrative Madden series.
Kings of the Beach, Electronic Arts, 1988. House ad for EA, Kool Cola (fictional), AVP (association of volleyball professionals), Clue (?), Juan Cuervo (?). The game was released for C64, NES and DOS. Same ads appear across platforms, but are unreadable on C64.
Indianapolis 500: The Simulation, 1989, Electronic Arts. No ads.
Lakers vs. Celtics and the NBA Playoffs, 1989, Electronic Arts. No ads besides the EA Sports banner at the judges' table and NBA team names.
PGA Golf Tour, Electronic Arts, 1990. PGA Tour logo in the shop and on dialog screens. No other ads.
NHL Hockey, Electronic Arts, 1991. It is unlikely but chronologically possible that the "SHARK" board refers to the Shark energy drink. The other boards seem to be mere decorations or ads for fictional products. Two other notable 1991 sports games by EA are John Madden Football II, an upgrade of the 1988 game, and John Madden Football 92, the next installment in the franchise. Neither of them had third-party ads, judging by the screenshots.
NHLPA Hockey, Electronic Arts, 1993. House ad (EA Sports Network, EASN that reads like ESPN) on ice resurfacer. Other games that came out that year - John Madden Football 93 and two basketball games - feature house ads.
Screenshots from a few games by other publishers:
Championship Baseball, 1987, Activision/Gamestar. House ad for Gamestar.
ABC Monday Night Football, 1989, Data East. No ads.
Super Real Basketball, 1990, Sega. House ads on the court.
Ads in EA Sports Games: 1994-1998
FIFA International Soccer, 1994 (on most platforms), Electronic Arts. This is the first installment in the long series of FIFA-licensed games. It also seems to be the first to feature third-part brands on the field. Notice how the Adidas ad was replaced with a generic billboard on the Genesis version of the game. Compare all versions here.
Other games that came out in 1994 - NBA Showdown, NBA Live 95, PGA Tour Golf 3, NHL 95 had either no ads, house ads, or logos of the respective license holders.
FIFA Soccer 96, 1995, Electronic Arts. The game introduced a new level of realism into its class. The field adorned with billboards and looked especially realistic, although it is hard to tell whether there were any third-party ads (there is a billboard for "TADAL", but I don't know if it's a real brand). No third-party ads in other titles that year.
Cricket 97, 1996, Electronic Arts. More house ads in this and other games released that year (Melbourne House and Beam are development studios).
NHL 97, 1996, Electronic Arts (image source: Gamespot). The Windows version of the game featured ads for Coolair and possibly others.
NCAA Football 98, 1997, Electronic Arts. Second NCAA game (first one by Mindscape came out in 1994). Features an ad for Nokia.
NHL 98, 1997, Electronic Arts. Multiple third-party brands, most notably by Mastercard, Coca-Cola and Easton (manufacturer of sports gear - see site).
FIFA: Road to the World Cup 98, 1997, Electronic Arts. In Windows version, ads for Gillette, Mastercard. Versions for other platforms don't seem to have third-party ads.
X Games: Pro Boarder, 1998, Electronic Arts (image: Gamespot). Plenty of placeholders in this snowboarding game, and possibly third-party ads.
World Cup 98, 1998, Electronic Arts. Many third-party billboards, including ads by Opel, Mastercard, Snickers, McDonald's, Philips, Casio and JVC. The same ads are also present in the PS and N64 versions.
NHL 99, 1998, Electronic Arts (image: Gamespot). Cross-platform field ads for Wendy's, Bauer.
Apparently, no ads on NCAA Football 99, NBA Live 99, Knockout Kings boxing title, or Tiger Woods 99.
Ads in EA Sports Games: 1998-2000
NHL 2000, 1999, Electronic Arts (image: Gamespot). Ads for Dodge, Mastercard, skates maker CCM, and apparently Target.
Madden NFL 2000, 1999, Electronic Arts. Still no third-party ads in this installment.
FIFA 2000: Major League Soccer, 1999, Electronic Arts. Ads for music labels Skint and Apollo 440, Adidas, McDonald's, Fuji, UNICEF, Eurosport. No ads in the GameBoy version. Still no ads in other franchises: Knockout Kings 2000, NBA Live 2000,
Superbike World Championship, 1999, Electronic Arts. Abundant logos of Champion (Aerospace?), bike maker logos, unidentified others.
FIFA 2001, 2000, Electronic Arts. Third-party ads as usual.
Knockout Kings 2001, 2000, Electronic Arts. No changes from the previous version.
Tiger Woods PGA Tour 2001, 2000, Electronic Arts. The golfing franchise still has no apparent ads but lets you play different celebrities. Features branded courses (e.g. Buick PGA Tour Courses).
WCW Backstage Assault, 2000, Electronic Arts. This wrestling game for N64 has a fake soda machine.
Superbike 2001, 2000, Electronic Arts. Sponsor brands on bikes.
Ads in EA Sports Games: 2001-2002
Madden NFL 2002, 2001, Electronic Arts (top image: Gamespot). Name of the helmet maker, Riddell, is now more legible. Ad for Upper Deck (probably the first for the franchise), a trading cards company. Ad for Riddell.com.
NCAA Football 2002, 2001, Electronic Arts (image: Gamespot). No apparent third-party ads.
Tiger Woords PGA Tour 2002, 2001, Electronic Arts (image: Gamespot). Nike's branding that appears on the box art become distinguishable in-game.
Tiger Woods PGA Tour 2003, 2002, Electronic Arts (image: Gamespot). Nike's branding becomes more prominent. Still no other brands and no ads in this virgin environment.
NHL 2003, 2002, Electronic Arts (image: Gamespot). Amazingly detailed graphics, but no obvious third-party ads.
FIFA Soccer 2003, 2002, Electronic Arts (image: Gamespot). Multi-level billboards with ads for Vodafone, McDonald's, Fuji, Hyundai, Toshiba and others.
NCAA Football 2003, 2002, Electronic Arts (image: Gamespot). Compare the soccer stadium above with this ad-less football field.
Ads in EA Sports Games: 2003-2006
NBA Live 2004, 2003, Electronic Arts (image: Gamespot)
EA's NBA series continue to show no ads in contrast to Sega's ESPN franchise or Microsoft's NBA Inside Drive game below:
ESPN NBA 2K5, 2004, Sega. Ads for Gatorade. Scrolling ad units.
NBA Inside Drive 2004, 2003, Microsoft. Ad for Air Canada. The ad unit is scrollable.
Madden NFL 2005, 2004, Electronic Arts. An unbranded PDA device (compare to the famously branded one in Splinter Cell).
Madden NFL 06, 2005, Electronic Arts (image: Gamespot). Ad for Heinz. Again, compare to Sega's ESPN NFL 2K5:
ESPN NFL 2K5, 2004, Sega. Billboards and product placement for Gatorade (image: Gamespot).
Both 2005 and 2006 versions of EA's NHL are healthily full of ads:
NHL 2005, 2004, Electronic Arts (image: Gamespot)
NHL 2006, 2005, Electronic Arts (image: Gamespot).
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