In-Game Revenue Explodes to $400M by 2009

A new report by Parks Associates suggests that the game industry has not capitalized on advertising opportunities like the movie and television industry.

Chances are you did not even know that current in-game advertising existed, but according to Parks Associates, in-game advertising accounted for more than $80 million in 2005 and could account formore than $400 million in 2009.   Most current in-game advertisements consist of automotive, food and beverage, and apparel products aimed at the male anged 18-34 demographic.
“In-game advertising, currently in its infancy, is poised to grow,” Michael Cai, director of broadband and gaming said. “Games are now an important form of family entertainment. Advertisers will soonrealize they can reach the whole family using this medium. More and more adults play video games with their children and teens are even playing games with their parents. In addition, the 35-54 femalegamers, who spend tens of hours playing casual games every month, are undermonetized.”

According to Parks’ research, demographics groups vary widely in their perception of in-game advertising:

-Males 18 – 34 are more open to seeing advertising than other age groups-29% say they would not mind seeing ads in games as long as it helps enhance game play, compared to only 19% among female gamers 35-54

-However, the percentage of gamers willing to put up with ads in games if there is a chance to win prizes is similar among these two groups (38 percent among 18-34 male and 35 percent among 35-54 female)

Men and women also differ about what is the least intrusive approach to in-game advertising. Almost half of men 18-34 (49 percent) prefer product placement over pre-game ads (22 percent) and in-game bulletin boards (18 percent). Women 35-54 prefer pre-game ads (42 percent) by a slim margin over product placement (36 percent) and between-level ad placement (13 percent).

In addition, gamers revealed through the survey that they expect a discount on game prices in exchange for seeing ads and the expected discount ranged from 31 percent for gamers ages 13-17 to 58percent for women 55 and older.   Video games have traditionally been viewed as a “private” affair much like reading a book, but with the adoption of broadband, MMO’s and other types of gameswhere users interact, advertising tends to make more sense. The question is whether gamers are willing to put up with in-game ads.