The gaming market is growing rapidly, with a new report by Kagan Research predicting US video game sales to rise to $16 billion by 2007, up from $10 billion in 2004, a rise of 61%. The report also estimates that by 2010, 54 million US households will own at least one portable video game console.
The increasing size of the games market offers advertisers another channel with which to capture their audience, however the lack of commercial breaks in games is forcing advertisers to think of different ways to reach game players.
Analyst eMarketer asserts that there are two primary solutions to this issue, ‘advergaming’, games designed around a product and made to promote it, and in-game advertising, in which products are placed in games, in the background, in the hands of game characters, or elsewhere.
The Yankee Group projects that in-game advertising will total $562.5 million by 2009, up from $34 million in ad revenues in 2009, compared to $83.6 million in 2004.
The company reveals that advergames accounted for more ad revenue than in-game ads in 2003 and 2004, and will be doing so in 2005. However, through the rest of the decade, in-game ads are predicted to be the dominant form of game-related advertising.
Using video games as an advertising platform has several few advantages, such as reaching the lucrative 18 to 35 year old core market. Additionally game players are reported to recall ads in games better than they do in other mediums, and many game players spend more time playing than they do watching television.
Mobile games companies are thought to be likely to embark on brand building and consumer marketing activities during 2005, seeking to build the profile of mobile gaming in the marketplace.
The expanding mobile games market is predicted to have a positive impact on advertisers, with a new generation of advertising being developed, offering the industry new channels with which to reach its target audience.
At the video games industry event, E3, held last month, a new media network was showcased, offering advertisers an interactive form of product placement in games, cashing in on the strong performance predicted for this medium (see New Advertising Channel Poses Future Threat To TV).
Related Links
