Exploring the developments and effects of in-game advertising and advergaming (Originally written in 2015)

Please note, this was originally written in 2015 as part of a University class.

Abstract

Digital Media advertising has been around for many years, however recently it has seen a  giant spike, especially in the entertainment industry’s largest medium – games.

In-Game Advertising has become increasingly popular for both game developers and advertising companies as both set out to look for new ways to increase their revenue flow.  For game developers, this has worked and mobile games as such as Flappy Bird and Fruit Ninja show this, however in-game advertising is beginning to work its way in to games created in larger development studios to subsidise some of the ever expanding costs of game development.

In-game advertising is not going away any time soon and some upcoming games are utilizing in-game advertisements in a different light – player immersion.

Advergaming has been around for a long time and is one of the oldest forms of digital media advertising – usually trying to capitalise on movie tie-in games aimed at children to build a positive brand image from a young age.

This paper also takes a look at the future of In-Game advertising and Advergaming through the use of Virtual Reality.

Introduction

In-game advertising and advergaming are methods of earning game developers revenue and increasing how companies and products are viewed. Game’s player-base’s are affected directly and are met with both hostility and open arms. This report analyses the different forms of In-Game advertising, how it effects players and their reactions as well as how much revenue this form of advertising generates.

Advergames are usuallly created by companies who wish to promote their brand name and products in a positive light.  Some advergames are aimed specifically at children.

History of In-Game Advertising

The use of In-Game advertising allows game developers to offset some of the massive game development costs and take more risks.

Due to the success of the mobile gaming market, specifically when looking at mobile phones and tablet devices, a new market has emerged – In-game advertising.  These devices have several hundred games launched to their respective platforms every single day because the demand for small, quick games on the go is high.

However, In-Game advertising goes as far back as the 1973 version of Lunar Lander as stated by Vedrashko (2008):

“If you landed at exactly the right spot, a McDonalds appeared. The astronaut would come out, walk over to the McDonalds and order a Big Mac to go, walk back and take off again. If you crashed ON the McDonalds, it would print out “You clod! You’ve destroyed the only McDonald’s on the Moon!”

Back in 2005 Sony Online Entertainment’s Everquest II was the first ever game to allow players to enter a command prompt In-Game and order food from Pizza Hut which would be delivered directly to their address. Doctorow (2005)

Brad OBrien (2014) shows several good examples of recent In-Game advertising and how it has changed from its inception back in 1973. One specific example is of the game Alan Wake which utilizes a TV within the game, which can be watched by the player that has full on adverts for companies as such as Verizon.  The car driven within the game is a Lincoln and several billboards are dotted around the game world. Alan Wake is a prime example of how In-Game advertising is more relevant than ever, with several different real world organizations and companies represented within the game world. The game is now seen as a modern classic despite the obviously heavy in-game advertising.

Within the mobile gaming industry, revenues and profits are soaring for many developers through In-Game Advertising alone, which is especially prevalent in free games. This is mostly due to the number of smartphone’s and tablet devices that are in customers hands are increasing. Many short burst games that provide an addicting beat your highscore gameplay as such as Flappy bird (2013) made copious amounts of money through In-Game banner advertisements that changed to a different advert every time the player selected retry.

VGA114.jpg

Immersive and Obstructive Advertising

Immersive Advertising

Immersive In-Game advertising is on the rise as developers search for a way to increase revenue without bombarding the players screen with advertisements.

It is argued that this form of advertising enables the players to immerse their self more in the game world solely through advertisements of real world companies and products. Lesnick (2014) of Cloud Imperium Games, developer of the largest crowdfunded project ever, Star Citizen agrees with the idea of Immersive In-Game Advertising:

One is to create ads for companies that might still exist in the 30th century and then a fictional ad campaign for them. So if McDonalds picks up a space billboard at a racetrack (not likely, just an example!), it has to advertise 30th century space food and not tell you to head on down to your local restaurant because the Filet o Fish is now on the dollar menu.

Many racing games engage in the practice of Immersive In-Game advertising including the recently release Forza Motorsport 5 (2013). Small advertising boards are used at the side of real world race tracks In Forza Motorsport 5.

Outside of billboards and advertising boards, Simcity (2013) collaborated with Nissan to create exclusive In-Game content, which was totally free. This content came in the form of the “Nissan LEAF Charging Station” and a Nissan electric car model, which can be seen within the game. A statement from the EA Staff (2013) states:

“This free in-game item is the perfect way to kick start your desire to create a city that will make you (and your Sims) happy. In the case of your Sims, the Charging Station provides happiness to the Sims that use it and a one-time wave of happiness to the nearby businesses. Need another bonus? It produces no sewage or garbage. That’s right! Green indeed“

It is plain to see that the content is painting Nissan in a very positive way; free content for the games players that boost happiness. Most players seem to not mind this type of In-Game advertising, especially when the download is free and the item has a positive outcome on their gaming experience.

Game developers and advertising companies cannot just place any advertisements in to the game and expect a good outcome.  The In-Game adverts need to be aimed at the gaming demographic and peak their interest enough, usually through images as a player is more likely to scan an image during gameplay than sit and read text on an advertisement.

mcd-1.png

Obstructive Advertising

Looking towards obstructive advertising some developers prefer this method of In-Game advertising where there is essentially banner ads or advertisements that obstruct the players view or take their attention away from the game. This is the type of advertising that most players find intrusive, annoying and offensive. These in-game advertisements can typically be found in Free-To-Play games, they are especially prevalent in mobile games.

Flappy Bird Is one of the many examples of a small game which main draw is to let the players attempt to better their own highscore, like in original arcade games as such as Pac-Man.  Each time the player fails, and they will fail, the banner advertisement will refresh and a new advertisement will take its place.  This method of advertising, accompanied with the popularity of the game led to the games developer Dong Nguyen cashing in at around $50,000 per day. Hamburger (2014)

Not only is nearly every free mobile game out there using some form of obstructive advertising, larger development studios like Electronic Arts have taken up this practice in one of their biggest franchises; Battlefield 4. Several gamers have spoken out about the fact there is advertisements for movies inside a £45 game. Shaikh (2014).

Microsoft have also taken up game advertising on the Xbox 360 and Xbox One consoles, not just inside the games themselves. The home page (dashboard) for the Xbox consoles is tile based, much like the layout for Windows 8 and this allows Microsoft to place advertisements for games, movies and other products within some of these “unused” tiles.

The advertisements, when clicked would link the user to store page on their Xbox console for whatever content was within the advertisement to entice the user to purchase the content. Ex Microsoft employee Murray (2014) who largely created the Xbox Advertisement infrastructure explains how Microsoft came to this point on his personal blog.

They have come under scrutiny for this form of advertising for years, Xbox users have constantly stated that the many millions of dollars that Microsoft earn through Xbox LIVE subscriptions means there is no place for advertisements within the Xbox platform.

Effects of In-Game Advertising

In-Game advertising is becoming increasingly popular with game developers.  Free-To-Play games, especially on mobile devices mostly have some form of obtrusive advertising – more often than not it is the use of banner ads.

Not all mobile games, or free to play games use In-Game advertising. Recently, Candy Crush Saga developer King.com has went as far as removing all In-Game advertising from all of their games across all platforms as the developer is focused on delivering a great player experience. Rose (2013)

Players have been mostly hostile to the idea of having advertisements within their gaming environment, especially if it is a paid for game, in return this may cause some players to stop playing the game. PlatypusMagic (2010).  Gamers that take part in online discussion on websites as such as Reddit will know that a lot of players are completely opposed to In-Game advertising, some players embrace it and others are completely indifferent.

Creating games is a business and businesses have to pull in the revenue to keep the lights on and In-Game advertising is a good way to create some extra revenue, especially if your game gains traction in Apple’s iOS Store. According to mobile game developers Halfbrick Studios, their popular game Fruit Ninja rakes in around $400,000 extra per month through In-Game advertising, this does not include the paid versions of the game. Del Rey (2012).

In-Game advertising generates a large sum of money; “In fact, according to in-game advertising behemoth Massive Incorporated, the annual spend on this form of advertising will be worth $1.8 billion by 2010. “ Shepherd (2009)

Many games use In-Game advertising to entice players to purchase a downloadable content (DLC) pack that will completely remove the advertisements from the game.  This is especially popular on mobile and tablet devices.  The cost to remove advertisements from the game is usually around 69p – The starting price point for full mobile games.

Runescape (2001), one of the world’s longest running and largest massively multiplayer online game has a free-to-play version of the game as well as a members portion. The game uses advertising as one of many ways to try and entice free-to-play players to subscribe and pay a monthly fee to get rid of the banner advertisements and have access to more in-game content.  This allows the developers to subsidize the free portion of the game with In-Game advertisements, and if a player chooses to subscribe, they gain a larger sum of money – In their eyes it is a win-win situation.

In-Game advertising can frustrate players greatly or it can create immersion if it is non obstructive. Advertising is not only a way to earn more revenue, but it is used to push players in to buying more content to remove the advertisements from their gameplay experience, if they so chose.  This way, game developers earn revenue as long as people are actively playing their games.

Exploring Advergaming

Advergaming is a form digital media advertising that organizations use to create positive brand image and to alert potential customers to their products. Advergames are typically free games purely aimed at promotion.

Below The Line advergaming is particularly used within the film industry and with movie game tie-ins.  These games are typically created alongside animated movies and aimed at children who look for familiar characters to the ones the watch in movies and TV shows.  More often than not, these games are not great due to being rushed for release to coincide with the launch of the movie. This promotes the brand even more, particularly in people who do not know much about it.

Companies want their advergames to be fun and engaging while challenging the player to complete certain objectives.  Levelling up, finding items, completing levels while showing the brand logo or product on the screen will bring positivity to the brand as the player will associate fun with the brand.  Similarly, if the game is bad or extremely repetitive, the player will associate those negative feelings with the brand.

The concept of advergaming is not a new one, it has been around nearly as long as the first In-Game advertisement. Just 10 years after the McDonald’s ad placement within Lunar Landing, Coca Cola came along with Pepsi Invaders a spin on the cult classic Space Invaders.  “The aliens are replaced with the letters P – E – P – S – I and the message “Coke Wins” is displayed upon completion”  (Shepherd, 2009).

There has been some very blatant advergaming even in modern games, Doritos Crash Course (2008) is a series of free side-scrolling platforming advergame’s for Microsoft’s Xbox 360 console.  Other than having Doritos in the name, there was not much actual product placement within the game itself. Doritos Crash Course was perceived as a fun game by many who played it and this may have had a positive effect on the Doritos brand despite the game being nothing about Doritos.

in-game-advertising

Future of Game Advertising

The re-emergence of Virtual Reality has sparked interest in a new type of digital advertising: Virtual and Augmented Reality Advertising.

Ingress (2013) is an Augmented Reality game developed by Google that is currently available as a free download on mobile platforms. Ingress is described as an augmented reality massively multiplayer online role playing GPS-dependent game. It is a augmented reality game that takes place in the real world using Google Maps where the player needs to defend their city. The developer created another app which works cooperatively with Ingress, it is designed to show interesting players around the player – in the real world. Furlanetto (2013) discusses the different ways in which Ingress can create a brand new way of advertising.

The Oculus Rift Virtual Reality headset was funded using the online crowd funding website Kickstarter and initially designed to finally bring Virtual Reality to games after many failed attempts in the past.  Oculus was bought by social media giants Facebook in July 2014 for $2 billion. Facebook CEO Mark Zuckerberg (2014) has stated more than once that he wants the Oculus Rift to be in as many people’s household’s as possible and with Facebook showing as many ads as it does, it comes as no surprise. In an article by Hollister (2014) Oculus Rift CEO Brendan Iribe stated the company desires to build a 1 billion player massively multiplayer online game with Facebook. This game would be like being inside another world with advertisements that will look and feel like you are experiencing them within the real world.

Virtual Reality can take In-Game advertisements and advergaming to an unprecedented level.  They have the opportunity to become completely unobtrusive and can be used to completely immerse the player within a Virtual Reality world as if it were the real living world.

Conclusion

In-Game advertising is a worthwhile investment for game developers s it creates a healthy cash flow and in some cases, can generate very high levels of revenue which can be invaluable for smaller development studios. This form of digital media advertising does not seem to be going away any time soon and is especially prevalent in the mobile market.  However, many larger development studios are pushing In-Game advertising through game immersion and not banner ads.

Many players have been hostile to the sheer thought of In-Game advertising and will go out of their way to avoid any such titles that use this practice.

Advergaming is aimed at both adults and children.  Movie tie-in games of animated movies are mostly aimed at children and trying to create a positive brand image with them from a very young age.

The future of In-Game advertising will be spearheaded by Virtual Reality hardware and software developers.  Virtual Reality will push immersive advertising to new limits.

References

Del Rey, J. (2012). Mobile App Economics: ‘Fruit Ninja’ Makes $400,000 a Month on Ads. [Online] Available: http://adage.com/article/digital/mobile-app-economics-fruit-ninja-makes-400-000-a-month-ads/235965/ [Accessed 30th October 2014]

Doctorow, C (2005). Everquest – Now with pizza. [Online] Available:http://boingboing.net/2005/02/18/everquest-now-with-p.html [Accessed: 28th October 2014]

Doritos Crash Course (2008). [Video Game, Xbox 360, 7+] Santiago: Behaviour Santiago.

EA Staff (2013). SIMCITY NISSAN LEAF CHARGING STATION, FREE FOR ALL MAYORS! [Online] Available: http://www.ea.com/asia/news/simcity-nissan-leaf-charging-station-free-for-all-mayors [Accessed: 28th October 2014]

Flappy Bird (2013). [Video Game, iOS and Android, Everyone] Vietnam: Dong Nguyen.

Forza Motorsport 5 (2013). [Video Game, Xbox One, 3+] Redmond: Turn 10 Studios.

Furlanetto, R. (2013). Google’s new virtual reality game is going to bring audiences to ads in real life. [Online] Available: http://qz.com/103393/googles-new-virtual-reality-game-is-going-to-bring-audiences-to-ads-in-real-life/ [Accessed 31st October 2014]

Hamburger, E. (2014). Indie smash hit ‘Flappy Bird’ racks up $50K per day in ad revenue [Online] Available: http://www.theverge.com/2014/2/5/5383708/flappy-bird-revenue-50-k-per-day-dong-nguyen-interview [Accessed: 28th October 2014]

Hollister, S. (2014). Oculus wants to build a billion-person MMO with Facebook. [Online] Available: http://www.theverge.com/2014/5/5/5684236/oculus-wants-to-build-a-billion-person-mmo-with-facebook [Accessed 31st October 2014]

Ingress (2013). [Video Game, Android and iOS, 13+] San Francisco: Niantic Labs.

Lesnik, B (9 August 2014). Immersion breaking? Something to consider. [Discussion, Online]Available:forums.robertsspaceindustries.com/discussion/comment/3216350/#Comment_3216350 [Accessed: 28th October 2014]

Murray, A. 10 years in games. Sorry for all the ads. [Online] Available: http://blog.theilluminatedsquid.com/post/94215585076/10-years-in-games-sorry-for-all-the-ads [Accessed 31st October 2014]

O’brien, B. (2014). History of In-Game Advertising and Top 6 Ad Placements. 3.53 mins. [Online] Available: http://vimeo.com/105932450 [Accessed: 21 October 2014]

PlatypusMagic. (18 March 2010). Would You Quit World of Warcraft if Blizzard…. [Online] Available: http://www.wowhead.com/forums&topic=148898 [Accessed 30th October 2014]

Rose, M. (2013). Candy Crush Saga‘s King abandons in-app advertising. [Online] Available: http://www.gamasutra.com/view/news/194190/Candy_Crush_Sagas_King_abandons_inapp_advertising.php [Accessed 30th October 2014]

Runescape (2001). [Video Game, PC, 13+] Cambridge: Jagex Games Studio

Shaikh, S. (2014). Battlefield 4 Now Has Annoying In-Game Advertisements of NFS Movie & Others During Loading Screen. [Online] Available: http://www.gamepur.com/news/13979-battlefield-4-now-has-annoying-game-advertisements-nfs-movie-others-during-.html [Accessed: 28th October 2014]

Shepherd, S. (2009). The History of In-Game Advertising. GamerLimit. [Online] July 28th. Available:http://gamerlimit.com/2009/07/the-history-of-in-game-advertising [Accessed: 30th October 2014]

SimCity (2013). [Video Game, PC, 7+] California: Maxis

Vedrashko, I. (2008). History of In-Game Advertising and Advergames: The First Wave. [Online] [Accessed: 21 October 2014]

Zuckerberg, M. (2014). Facebook’s (FB) CEO Mark Zuckerberg on Q3 2014 Results – Earnings Call Transcript. [Online] Available: http://seekingalpha.com/article/2607755-facebooks-fb-ceo-mark-zuckerberg-on-q3-2014-results-earnings-call-transcript [Accessed 31st October 2014]

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s