Analyst says in-game advertising is good business – US$ 2 billion by 2011

In-game advertisements - nothing new to gamers - Image 1

In-game advertisements are not really new to gamers. Game developers can basically plaster a Coca-Cola logo on a zombie‘s chest and players wouldn’t mind. (Though that doesn’t make them less annoying.) Anyway, analyst Paul Verna from eMarketer sees a bright future for in-game advertising.

Developing games is not cheap at all, especially when the technology improves every other day in leaps and bounds. The solution for some developers is offering advertising spots to other companies that they will insert in-game. In a report called “Video Game Advertising: Getting to the Next Level”, Verna says that in-game advertisements would help marketers (it’s a whole new platform), fresh opportunities for tech companies, and a good source of revenue for game developers.

Verna gives the figures: “over the next five years video game advertising will grow at a compound annual growth rate of nearly 23%, reaching nearly $2 billion by 2011.” The growth will be caused by the widening demographics of gamers – young and old, men and women, casual and hardcore. Online console titles and MMOs are the best sites for in-game ads as they have the bulk of the gamer population and they will be a great factor in the growth as well.

Currently, the cost of making “advergames” have reached US$ 164 million and is expected to reach US$ 344 million in 2011. Revenues from the in-game advertisements are estimated to reach a whopping US$ 969 million (in 2011) in the US alone. And those are very good numbers from a marketing point of view.

There’s no turning back now.

In-game advertisements - nothing new to gamers - Image 1

In-game advertisements are not really new to gamers. Game developers can basically plaster a Coca-Cola logo on a zombie‘s chest and players wouldn’t mind. (Though that doesn’t make them less annoying.) Anyway, analyst Paul Verna from eMarketer sees a bright future for in-game advertising.

Developing games is not cheap at all, especially when the technology improves every other day in leaps and bounds. The solution for some developers is offering advertising spots to other companies that they will insert in-game. In a report called “Video Game Advertising: Getting to the Next Level”, Verna says that in-game advertisements would help marketers (it’s a whole new platform), fresh opportunities for tech companies, and a good source of revenue for game developers.

Verna gives the figures: “over the next five years video game advertising will grow at a compound annual growth rate of nearly 23%, reaching nearly $2 billion by 2011.” The growth will be caused by the widening demographics of gamers – young and old, men and women, casual and hardcore. Online console titles and MMOs are the best sites for in-game ads as they have the bulk of the gamer population and they will be a great factor in the growth as well.

Currently, the cost of making “advergames” have reached US$ 164 million and is expected to reach US$ 344 million in 2011. Revenues from the in-game advertisements are estimated to reach a whopping US$ 969 million (in 2011) in the US alone. And those are very good numbers from a marketing point of view.

There’s no turning back now.

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