A Word from Gaming’s Sponsors

First, the good: What if I told you it was possible to enjoy critically-acclaimed PC titles for free, or entire original Xbox 360 outings for as little as $3.99? Now, the bad… How would you react if informed that all required the active sponsorship of today’s biggest brands, keen on reaching people just like you where you’re most vulnerable – at rest in front of a TV screen or monitor?

Granted, I may be painting the situation in the harshest light possible. Let’s face it, though – nobody likes to be called a sellout. But, at least to some meaningful degree, it’s inevitable that this is exactly what dozens of today’s top videogame providers are going to have to do if they want to survive. Given current industry economics, it’s inevitable that the practice of “advergaming,” or utilizing digital diversions to promote a given product, service or perspective, will only continue to grow in coming years – ditto for in-game advertising.

To some degree, it’s a major issue. I, for one, certainly don’t waynt to be flogged with pop-up windows trumpeting Wheaties as the breakfast of champions in the middle of an otherwise pleasant round of NBA Live 07. Nor does being forced to sit through a trailer trumpeting the virtues of Skechers shoes before diving into Halo 3 sound particularly palatable. And, hey, as we all observed with Sony’s recent “All I Want for Christmas is a PSP” viral video marketing debacle, even worse alternatives exist. Still, there is something to be said for the practice, with the biz expected to generate $312.2 million in revenue by 2009, up from $83.6 million in 2004, says Boston research firm Yankee Group.

For one, publishers desperately need the income such practices bring in to help subsidize their games, with the average cost of a PlayStation 3 or Xbox 360 title now ranging from $20-30 million – on-par with independent films. Recall that Namco Bandai Holdings Inc. president Takeo Takasu further recently revealed that software manufacturers must sell 500,000 units of any PS3 title to break-even. That’s a real cluster-you-know-what considering that NPD further reported only 687,300 of the systems had sold by year-end 2006.

Oh, and lest we get all high and mighty, remember… The additional revenue streams product placement and sponsorship present don’t just offer a lifeline to cash-strapped firms like Atari and Majesco either. They also present a viable way for independent developers to remain stable and profitable in an era where growing cost pressures are leading to increasing convergence. (See MumboJumbo’s recent acquisition of renowned studio Ritual Entertainment, whose failed experiment in serial gaming, SiN Episodes, left the company in a grim situation.) Even casual game developers are cashing out, with Microsoft saying it’ll soon share up to $250,000 a year in advertising revenues with top talent. That’s not bad for products frequently built by a ragtag bunch of guys in their garage, and provides tangible encouragement that will only help further foster the cause of indie development.

What’s more, the presence of real-world companies and products within certain titles can sometimes add greater realism. According to a comScore Networks study conducted in 2006, over 50% of gamers surveyed stated that the inclusion of advertising would have no negative impact on their likelihood of playing a game. And almost a third of “medium gamers” (those who play 11 hours or less a week) say the presence of actual products and companies makes the game appear more believable. After all, watching Splinter Cell’s Sam Fisher use a Sony Ericsson phone seems a natural enough fit. Most would probably rather see a Gatorade billboard in sports sims than one for faux replacements “MegaLime” or “QuenchAide” to boot.

Advergaming, interestingly, even offers everyday folks like us some surprising value. See Burger King’s 3.2 million-strong sales of its custom-commissioned Xbox 360 titles Pocketbike Racer, Sneak King, and Big Bumpin’, offered with any value meal for just $4. (Most competitors on the platform go for $59.99.) Don’t forget the fact you can play amazing games like Blasterball 3 free of charge in exchange for willingly taking less than 60 seconds to subject yourself to an Acuvue contact lenses commercial either. What’s more, websites like Wrigley’s Candystand.com, which has offered free online games (and great ways to goof off at work) since 1997, average 5 million hits a month. And America’s Army, a complimentary government-sponsored MMO – not to mention arguably the greatest testimony to the field’s success – has garnered 8 million users, literally putting it in the same league as World of Warcraft.

So while many have been quick to condemn the practice, or chastise organizations like Double Fusion and IGA Worldwide for their promotion of such tactics, the sooner we come to grips with it, the better. As Microsoft’s purchase of Massive Inc. and Google’s recent $23 million acquisition of in-game advertising start-up AdScape Media illustrate, like it or not, the biz isn’t going away anytime soon. Mind you, I’m not saying this is necessarily a positive. Just that, given market realities, we enthusiasts have to start wrapping our heads around the fact that as the hobby has become more mainstream, and thus appealing to corporate America, the game itself is changing.

However, rather than simply condemn the suits who buy into this vision as a knee-jerk reaction – no matter how understandable, given the spirit of creativity and irreverence the medium’s renowned for – we’re much better off realizing as follows. Advergaming and in-game advertising aren’t necessarily evil institutions unto themselves, nor are they always huge annoyances… It’s all in how publishers and sponsors choose to utilize these vehicles. What’s more, such solutions can even offer folks like us great value: Seriously, who minds the presence of a Dodge logo if it means getting to skip out on monthly charges and play Madden NFL for free online?

However, naturally, game makers are still coming to grips with such partnerships, and mistakes will be inevitable. And, of course, it’s our responsibility as concerned players to vote with our dollars and let them know when it is or isn’t OK to flog something by way of digital diversion. My only concern: Let’s just hope the learning process doesn’t mean seeing Mario sporting a Gap hoodie and representing for Jive Records anytime soon.

Scott Steinberg is managing director of Embassy Multimedia Consultants (www.embassymulti.com).

The views expressed here are solely those of the author and do not reflect the beliefs of Digital Trends.