Phil Elliott
12:46 (BST)
19/03/2008
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Massive: In-game advertising is growing
Publisher feedback contradicts dismissive positions of Stringer and Kotick
According to Massive Inc, the in-game advertising company which announced a significant expansion to its existing deal with Electronic Arts yesterday, feedback from publisher partners proves that the medium is being taken seriously as a revenue stream.
That contradicts the views of Sony Corporation chief executive Sir Howard Stringer and Activision boss Robert Kotick, who were sceptical in their comments at a summit in Davos recently.
"The [supposed] solution to everything at the moment in the digital space is ad-supported," said Stringer. "While advertisers are happy to talk that up, there is a limit to the amount of money available."
And Kotick added: "It's early days. I wouldn't go in that direction myself."
But Tom Hosking, regional sales manager for the EMEA territories at Massive, told GamesIndustry.biz that in-game advertising was having a clear impact.
"We're seeing that in-game advertising is providing new revenue streams for publishers," he said. "There are lots of new ways that companies are looking for new revenue streams, and margins are being squeezed as the industry has matured.
"We know from feedback we've had from a number of our publishing partners - and really this deal expansion with EA validates this - that there are publishers out there that are seeing significant revenue increases with in-game advertising.
"What other people in the industry say - it's a view, and they may well have other plans for new revenue streams, but the feedback that we're getting is that it isn't insignificant."
Jonathan Epstein, boss of another in-game advertising firm Double Fusion, previously told GamesIndustry.biz that he expected as much as 10-20 per cent of development budgets to be offset by advertising income in the future - and Hosking believes that the big numbers are possible.
"There are a number of analysts out there that are pretty active at suggesting how big in-game advertising is going to be in the years ahead," he said. "We've got our own projections of where we think our revenues are going to be, but that's obviously not something I'd share with anybody externally.
"But the pointers from those that are looking at things on a holistic level, and have a number of data sources, suggest that we're in a period of rapid growth, and by 2011, 2012, we're going to be seeing an industry that's not far shy of USD 1 billion."
Parks Associates forecast last June that the in-game advertising business would be worth USD 2 billion by 2012.
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