Language Selection

English French German Italian Portuguese Spanish

Products Placed Liberally in Video Games

Filed under
Gaming

As a member of the Elite Operations Division in the video game "True Crime: Streets of LA," the character Nick Kang must find his way to a truck heist at the flagship Puma sportswear store. Lucky for him, he has a Motorola handset with built-in global positioning system technology.

In the online game Everquest II, players don't need to leave their fantasy world to satisfy hunger pangs. They can click an icon and have food delivered from the nearest Pizza Hut - within 30 minutes.

The product placement - benign, interactive and sometimes aggressive - belongs to a growing push by advertisers to reach big-spending males from 18 to 34 who log long hours playing video games.

Analysts say in-game advertising could generate as much as $1 billion in new revenue for the fast-growing industry by the end of the decade because it almost assures advertisers quality time with an audience they crave: Young men.

Research by Nielsen Entertainment has found that prime-time television is losing younger male viewers, while Sony Computer Entertainment America notes that several million people are glued to their Playstation 2 consoles playing online games during prime-time TV viewing hours.

The strategy of insinuating ads into video games was a hot topic at this week's E3 video games trade show, where Sony, Nintendo, and Microsoft unveiled their next-generation game consoles.

"Game publishers have to recognize that there are millions, if not billions, of dollars in advertising money coming their way in the next few years," said Justin Townsend, chief executive of IGA Partners Europe, an agency that places in-game ads for clients.

The increased spending is another sign of the booming popularity of video games. In 2004, $7.3 billion worth of video and PC games were sold in the United States. By comparison, the domestic movie industry saw ticket sales of $9.4 billion.

On the first day it hit stores last November, the hugely popular game "Halo 2" generated $125 million in sales, while the Pixar animated film "The Incredibles" reeled in $70 million in ticket sales over the same weekend.

Until very recently, advertisers weren't rushing to place products in video games. They spent only $34 million in 2004 on in-game ads - a far cry from the billions spent on television advertising.

But that amount is expected to explode to $562 million by 2009, according to The Yankee Group research firm. Including "advergames" - games built solely to promote a product - game advertising will approach $1 billion by the end of the decade, the firm predicts.

Advertisers were wary in the past, partially because there wasn't a way to measure the effectiveness of the ads. Now, Nielsen Entertainment, which measures TV ratings for advertisers, is testing a system to gauge the impact of in-game ads.

"We kind of have a pretty good idea of how people are watching TV," said Michael Dowling, a Nielsen executive. "With a video game, because of its nonlinear nature, we have no idea how people are navigating their way through the game."

Nielsen already has paper diaries in the homes of some gamers to document their game-playing. Now, in conjunction with Activision and Jeep, Nielsen has embedded an electronic marker in each Jeep image included in "Tony Hawk's Underground 2."

Each time a Jeep vehicle is used or appears on the game screen, the electronic tag sends a signal over the Internet to Nielsen, which tracks the hits.

Much of the advertising in the works for games mirrors reality. A virtual recreation of Times Square, for instance, would include billboards for products. A Nascar game might include actual car models decorated with real ads.

And games can do what no other medium can - force players to interact with an ad.

In "Underground 2," players have to perform tricky skateboard stunts involving a Jeep. In the Ubisoft game "Tom Clancy's Splinter Cell," players must use a Sony Ericsson cell phone to deal with some challenges.

The interaction is likely to produce stronger product recognition and sales than traditional ads, said Jeff Bell, vice president of marketing communications at Daimler Chrysler, the maker of Jeeps.

"We have plenty of chances to put 30-second advertisements on television and not know whether people really watch them or not," Bell said during an E3 workshop.

Some companies have found another way to reach young male gamers - market their own games.

Chrysler said the simple sports and puzzle games it has distributed in magazines, CDs and Web sites have led to sales. The games require players to register and provide data that can then be matched to subsequent purchases.
Of 3.5 million people who registered and downloaded games in the past 18 months, 10,000 eventually bought Chrysler vehicles, Bell said.

"That was a wake-up call for us," he said.

The tactics have emerged as the industry wrestles with increasing costs. Developing a top-level video game with sophisticated graphics can now cost as much as $15 million - a price tag that could triple in the next few years to keep up with the capabilities of the latest consoles.

Game makers are balking but say they will likely have to raise prices to cover some increasing costs. The hikes are risky because many customers are teenagers who can't afford steep increases.

That has made revenue from in-game advertising even more important.

"It's not a 'nice to have,' it's a must have," said Yankee analyst Mike Goodman.

GARY GENTILE
Associated Press

More in Tux Machines

OSS Leftovers

  • Berkeley launches RISELab, enabling computers to make intelligent real-time decisions
  • Amazon, Google, Huawei, and Microsoft sponsor UC Berkeley RISELab, AMPLab's successor
  • Brotli: A new compression algorithm for faster Internet
    Brotli is a new open source compression algorithm designed to enable an Internet that's faster for users. Modern web pages can often be made up of dozens of megabytes of HTML, CSS, and JavaScript, and that's before accounting for images, videos, or other large file content, which all makes for hefty downloads. Such loads are why pages are transferred in compressed formats; they significantly reduce the time required between a website visitor requesting a web page and that page appearing fully loaded on the screen and ready for use. While the Brotli algorithm was announced by Google in September 2015, only recently have the majority of web browsers have adopted it. The HTTP servers Apache and nginx now offer Brotli compression as an option. Besides Google, other commercial vendors (such as Cloudflare and DreamHost) have begun to deploy support for Brotli as well.
  • New Year’s resolution: Donate to 1 free software project every month
    Free and open source software is an absolutely critical part of our world—and the future of technology and computing. One problem that consistently plagues many free software projects, though, is the challenge of funding ongoing development (and support and documentation). With that in mind, I have finally settled on a New Year’s resolution for 2017: to donate to one free software project (or group) every month—or the whole year. After all, these projects are saving me a boatload of money because I don’t need to buy expensive, proprietary packages to accomplish the same things.
  • Toyota and Ford Promote Open Source Smartphone Interfaces
    Ford and Toyota have formed a four-automaker consortium to speed up the deployment of open source software for connected in-car systems, according to a report by Bloomberg. The SmartDeviceLink Consortium, which includes Mazda, PSA Group, Fuji, and Suzuki, aims to prevent Apple and Google from controlling how drivers connect smartphones to their vehicles. Suppliers Elektrobit, Harma, Luxoft, QNX, and Xevo have also joined the organization, which is named after an open source version of Ford’s AppLink connectivity interface, a system used in over 5 million vehicles globally.
  • What your code repository says about you
    "You only get one chance to make a first impression," the old saying goes. It's cliche, but nevertheless sound, practical advice. In the realm of open source, it can make the difference between a project that succeeds and a project that fails. That's why making a positive first impression when you release a repo to the world is essential—at least if your motivations involve gaining users, building a community of contributors, and attracting valuable feedback.
  • The Open Source Way of Reaching Across Languages
    I don’t speak Spanish, but that doesn’t mean I can’t learn some important things from this video. The visuals alone are quite instructive. At my public library job, I mentor a number of wonderful Latino youth. One of them might ask me about open source CAD software — and I’ll direct them right to this FOSS Force article. Of course, I subscribed to the YouTube channel of the creator of this video, and also clicked on its like button. If the screencast creator comes back to look at this video in February, they’ll find that they have a number of new subscribers, a number of likes for the video and the video view count might be more than 100. All those indicators will be encouragement for them to make their next open source screencast. And so it goes. That’s how we support each other in the open source world.
  • School systems desperate for standards-aligned curricula find hope
    Open Up Resources is a nonprofit collaborative formed by 13 U.S. states that creates high-quality, standards-aligned open educational resources (OERs) that are openly licensed under CC BY-SA 4.0. Unlike other providers, Open Up Resources provides curriculum-scale OER options; they believe that while many people seem to know where to find supplemental materials, most curriculum directors would not know where to look if they were planning a textbook adoption next year.
  • Visual Studio Test joins Microsoft's open source push [Ed: More openwashing of proprietary software from Microsoft, which interjects surveillance into compiled code]
  • Microsoft Open-Sources DirectX Shader Compiler [Ed: Windows lock-in.]

Red Hat's Survey in India

From Raspberry Pi to Supercomputers to the Cloud: The Linux Operating System

Linux is widely used in corporations now as the basis for everything from file servers to web servers to network security servers. The no-cost as well as commercial availability of distributions makes it an obvious choice in many scenarios. Distributions of Linux now power machines as small as the tiny Raspberry Pi to the largest supercomputers in the world. There is a wide variety of minimal and security hardened distributions, some of them designed for GPU workloads. Read more

IBM’s Systems With GNU/Linux

  • IBM Gives Power Systems Rebates For Linux Workloads
    Big Blue has made no secret whatsoever that it wants to ride the Linux wave up with the Power Systems platform, and its marketeers are doing what they can to sweeten the hardware deals as best they can without adversely affecting the top and bottom line at IBM in general and the Power Systems division in particular to help that Linux cause along.
  • Drilling Down Into IBM’s System Group
    The most obvious thing is that IBM’s revenues and profits continue to shrink, but the downside is getting smaller and smaller, and we think that IBM’s core systems business will start to level out this year and maybe even grow by the third or fourth quarter, depending on when Power9-based Power Systems and z14-based System z mainframes hit the market. In the final period of 2016, IBM’s overall revenues were $21.77 billion, down 1.1 percent from a year ago, and net income rose by nearly a point to $4.5 billion. This is sure a lot better than a year ago, when IBM’s revenues fell by 8.4 percent to $22 billion and its net income fell by 18.6 percent to $4.46 billion. For the full 2016 year, IBM’s revenues were off 2.1 percent to $79.85 billion, but its “real” systems business, which includes servers, storage, switching, systems software, databases, transaction monitors, and tech support and financing for its own iron, fell by 8.3 percent to $26.1 billion. (That’s our estimate; IBM does not break out sales this way, but we have some pretty good guesses on how it all breaks down.)