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Advertisements becoming part of video game scenery

Thu., April 28, 2005

Video games have provided one of the last refuges from the ubiquitous advertising that hits consumers from every direction. But that’s beginning to change, thanks to an innovative startup that puts ads into games.

Massive, based in New York, has figured out how to insert advertisements into the background scenery of video games that run on both PC and game consoles. With its custom technology, the company can insert advertisements into billboards, storefronts and other parts of the scenery in a video game. It can even change the ads on a periodic basis.

More than a dozen big advertisers and 10 video game publishers have agreed to participate in Massive’s advertising network, which has a business model resembling product placement in movies, said Nicholas Longano, chief marketing officer at Massive.

The added revenues from the ads could be a bounty for game developers and publishers. Massive estimates that it can add $1 or $2 net profit to the publisher’s pocket for a $50 game. Depending on the type of game, a publisher’s profit is usually only $6 to $8 per game, so the new source of ad revenue could be a big deal for game companies.

The company’s founder and CEO, Mitchell Davis, hit upon the idea a few years ago when he was playing a video game that was supposedly set in a big city. But as his character moved past storefronts and billboards, the illusion of the game was destroyed by fake ads. He wondered how he could put real ads into the game to make it look more real.

Others had tried to do such product placement before. Intel and McDonalds inserted ads into Electronic Arts’ Sims Online game a couple of years ago. But the ads were static, and they required close work with the game development team many months in advance of the game release.

Massive says it has had great success lining up advertisers and publishers. The advertisers include Intel, Paramount Pictures, Universal, Coke, Comcast’s G4 gamer TV network, Nestle, Honda, T-Mobile, UPN, NewLine Cinema, Verizon DSL and Dunkin’ Donuts. Game publishers include Atari, Ubisoft, Vivendi Universal Games, Funcom, Take-Two Interactive Software, Legacy Interactive, Codemasters, Eidos and Majesco.

Davis’ team invented a technology that could use the Internet to download ads into a part of the game’s scenery on a regular basis. Massive’s own engineers work with game developers for just a couple of weeks to make sure the ad fits in the space of a virtual billboard or imaginary storefront.

“We make it look realistic, so the ad just looks like part of the game,” said Longano. “It really brings to life the environment.”

By the fall, Longano said that 40 game titles would use the in-game advertisements. Notably, only games with live Internet connections will be able to download new ads. Consoles or PC games that are not connected would only be able to display the same ad over and over in a particular spot in the game.


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