The World of Illusion
Given today's trends, it seems almost logical to find the "fictional landscape" of a video game sprinkled with ads & product placements. Ads which sell everything from shoes to movies.

For an idea of what's about to happen, take a look at the preview of the soon-to-be released "Need for Speed Underground 2". As you "drive" through the imaginary streets, you will race past realistic skyscrapers with even more authentic neon hoardings that sell real-life brands like Burger King. (Talk about marrying the fictional world with the real!)

Now imagine that the hoarding or product ad is swapped or updated dynamically over the Internet! So that, during one run of a game, you can see an Adidas ad while the next run shows a Nike ad ! (All managed smoothly by an independent ad server.)

And finally, the "viewership data" could be automatically recorded and displayed instantly to the advertiser with (last known) address of the consumer.

Natural Progression?
U.S. sales of video games in 2003 ($11 billion) overtook movie box-office receipts. And Nielsen Media reports confirm that TV viewer-ship declined significantly while time spent on video games increased sharply in 2003.

Meanwhile, the new games offer more & more unique, state-of-the-art features. Like directing your own digital movie based on the game landscape settings.

It is obvious that computer & video games are culling out viewers from movies & television. And it is equally obvious that in-game advertising will be a natural by-product!

Add the power of the ubiquitous Internet, and you have an interesting combination of digital programs running on local computing power with dynamic updates from ad servers.

Revenues from game advertising worldwide are estimated to be around $200 million. And expected to cross $1 billion by 2008.

Game Advertising - An Update
Here is an update of what is already happening in In-game Advertising.

Daimler Chrysler's budget for ads in video games is in excess of 10% of overall marketing budget. (Needless to mention, it was nil 4 years ago.) Quite simply, planting Chryslers, Jeeps & Dodge cars in video games is becoming routine!

Very soon, Massive Inc. is due to launch its video game advertising network. This will allow marketers to deliver new ads into console and PC games via an online connection. (Just imagine : Hoardings visible as part of a scene could be webcast to feature a new product launch one day and changed to a new beer brand the next. And all webcasts could be tailored by geography, so that players in different regions view different ads.) More importantly, Massive's service will track the viewing time each ad gets - a key metric that advertisers rely on in paying for television spots.

Nielsen is working on a game-rating service similar to its existing TV-ratings system.

While the world's largest video game publisher Electronics Arts Inc. has already reported a 60 % hike in in-game ads this year.

The Future
In-game advertising has gained momentum because traditional television and print ads are becoming less effective. No wonder game publishers like Vivendi, Ubisoft & Atari are already planning to use services like Massive to enhance their advertising revenues.