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In-game advertising (IGA) is advertising in electronic games. IGA differs from advergames, which refers to games specifically made to advertise a product.[1] The IGA industry is large and growing.[2]
In-game advertising generated $34 million in 2004, $56 million in 2005,[3] $80 million in 2006,[4] and $295 million in 2007.[2] In 2009, spending on IGA was estimated to reach $699 million USD, $1 billion by 2014[5][6] and according to Forbes is anticipated to grow to $7.2 billion by 2016.[7]
The earliest known IGA was the 1978 computer game
IGA can be integrated into the game either through a display in the background, such as an in-game billboard or a commercial during the pause created when a game loads, or highly integrated within the game so that the advertised product is necessary to complete part of the game or is featured prominently within cutscenes.[9] Due to the custom programming required, dynamic advertising is usually presented in the background; static advertisements can appear as either.[10][11] One of the advantages of IGA over traditional advertisements is that consumers are less likely to multitask with other media while playing a game, however, some attention is still divided between the gameplay, controls, and the advertisement.[12][13]
Static in-game advertising
Similar to
A number of games utilize billboard-like advertisements or product placement to create a realistic gaming environment.[16][17] For example, many sports games incorporate these advertisements to simulate the heavy advertising within professional sports.[18][19] Similarly, many games employ brand-name products such as guns and cars as in-game status symbols.[20][21][22] These brand references may not be advertisements and are instead placed in the game purely for plot or design reasons. However, trademark owners sometimes object to unlicensed references to their trademarks. See, e.g., E.S.S. Entertainment 2000, Inc. v. Rock Star Videos, Inc.[1][23]
Dynamic in-game advertising
Increasing Internet connectivity and bandwidth has increased the use of dynamic IGA, which allows the game manufacturer or its advertisement vendor to deliver advertisements remotely, update advertisements after the game is launched, and target advertisements based on time or geography.
Dynamic
Advertising in online-only games
Freemium and free-to-play
Pay-to-play
Pay-to-play games charge players to access the game content. Depending on the game environment, some pay-to-play games feature IGA. For example,
Advertising industry reaction to IGA
The advertising industry has generally embraced IGA and advergaming as effective ways to reach 16 to 34-year-old males.
Several advertising agencies or ad networks specialize in IGA, and even more traditional advertising agencies have experimented with IGA.[24] However, many advertisers do not embrace video games as a viable advertising medium because of the continuing difficulties in measuring IGA's effectiveness despite the implementation of GamePlay Metrics, uncertainty about how many viewers the game will reach, and the long development cycle inherent in video games.[9][46][47]
Reducing advertiser risk
Viewer numbers are hard to estimate because it is difficult to gauge the popularity of a game before its release; however, advertiser risk can be partially mitigated through benchmark-based advertisement payments on game units sold or a refund agreement if a certain number of game sales are not reached.[9] This may not, however, protect the advertiser from an unwanted association with a poorly performing game or advertisement.
It is also difficult to plan in-game advertisements because
Game industry reaction
Game publishers have mixed feelings about IGA.[41] IGA can create new revenue streams; in some cases publishers' profits have increased by an extra $1–2 per game unit sold (in addition to the typical $5–6 profit per unit).[1] Some mobile phone games have replaced charging fees to gamers with IGA, and it is an important source of income for browser-based and other Internet games that do not feature micro-transactions or pay-to-play.[48][49] Some publishers see IGA as a way to offset growing game development costs, while others believe IGA will allow them to experiment with gameplay by reducing the financial risks associated with game development.[50][51]
However, not all publishers have found IGA successful. In 2008,
Another issue publishers and developers must deal with is integrating IGA into games without alienating or frustrating players.[36] The general goal of IGA is to insert advertising that gets noticed while not interrupting the player's enjoyment of the game.[9] Developers need some creative control of the IGA to ensure it fits the virtual setting, which can be an issue because advertisers usually want to project a certain image and protect their brand image.[9][54] Game companies worry that they may be forced to change the game as requested by advertisers if IGA becomes a predominate revenue source, and face a possible backlash from consumers.[55] In some games it may be easier to rely on revenue from sales of virtual goods, as they may provide a more reliable and greater stream of income than advertising while having the advantage of being directly incorporated into the game experience and being under the complete creative control of the developer.[53]
Gamer reaction
Gamer reaction to IGA has also been mixed. A 2009 study by an advertising company found that 80% of consumers correctly recalled an advertiser and 56% had a more favorable impression of the advertiser because it allowed them to play a free game.[39] However, companies have found that gamers do not want distracting advertisements when they have already paid the retail price and/or a monthly subscription fee.[41] Gamers have shown a distaste for advertisements that distract them while they are trying to enjoy themselves.[41] A small, 100 participant, 2010 study suggested that gamers may be more likely to favorably respond to advertisements and products which are congruent with the game environment.[9][56]
Gamers may feel that IGA is invasive and in some cases have dubbed IGA-supported software as
In-game advertising can also lead to negative reviews for a video game, as occurred in 2013 with
Effectiveness
Several academic researchers have attempted to understand how effective IGA is. The effectiveness of such advertising is debated by several scholars. Yang et al.[60] found some types of recognition were low among college students, although players did retain word fragments in sports games. Grace and Coyle [61] found that 35% of players could recall advertised brands in a controlled study of car racing games. Lee and Faber found that the primary factors for player-retention of IGA are location of brand messages in the game, game involvement, and prior game-playing experience.[62]
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