f13.net

Microsoft plans to buy videogame-ad company: report (http://today.reuters.com/news/articlenews.aspx?type=technologyNews&storyid=2006-04-26T084910Z_01_N26357967_RTRUKOC_0_US-MASSIVE-MICROSOFT.xml)

it begins....

They talk about a current total market of ~$60 million, projecting $160 million next year and $700 million by 2010.  What's that, 1% of the total game industry or $70 per copy of Halo 2 (2.5m), GTA 3 (7m), and Half Life 2 (1.7m) combined?  To give some context, ESPN - the advertising gold mine - only pulls in $1.6 billion in ad revenue from 90 million subscribers, corresponding to ~$19 per subscriber.  I'd have to be pretty generous with the number of people playing each copy sold or the number of other games with those kind of sales figures to get there.

What is the prognosis for video game advertising? Are we talking about blockbuster titles only? Modern genre only?  In this purely in-game or does it include loading screens, box-inserts, tie-ins?

In some ways Microsoft is a competitor to many of the companies who would want to have online ads, especially once Vanguard comes out.  If I was another MMO I wouldn't want to give a competitor hooks into my program, let alone all the information that could be derived about how many people are playing my game and when.

Maybe they plan to abandon their current customers like AO and use this purchased code for xbox live, get a nice ten second Mountain Dew commercial before you get to play your game.  Doritos icons on the dashboard.  This loading time brought to you by Pepsi.

I don't see how this technology is that hard to duplicate. Therefore this comes down to being a pure marketing business. This technology is a big positive for the game publishers, but I am stating the obvious.

I look forward to matches of "Capture the Mountain Dew can" in Halo 3.

Fixed that for you.

It's official. No price stated yet.

http://www.massiveincorporated.com/site_network/pr/05.04.06.htm

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Microsoft to Acquire In-Game Advertising Pioneer Massive Inc.
 
Massive’s technology for weaving dynamic, relevant ads into video games will extend next-generation advertising across Microsoft properties and beyond.

REDMOND, Wash. — May 4, 2006 — Today at the seventh annual MSN® Strategic Account Summit, Microsoft Corp. announced it is acquiring Massive Inc., the New York-based creator of a world-leading network for video game advertising, in a move that will help deliver dynamic, relevant ads across Microsoft’s online services, starting with Xbox Live® and MSN Games. Massive’s solution depicts brands in various forms within the game — on soft-drink cans and pizza boxes, on billboards and posters, and in images on TV screens — where gamers would expect to see them in real life, adding realism to the overall gaming experience. Massive employees will continue to work from their current locations, including their headquarters in New York and offices in London, Los Angeles, Chicago, San Francisco, Paris, Sydney, Cologne and Toronto. Financial details of the acquisition were not disclosed.

The Opportunity for Advertisers
The acquisition of Massive broadens Microsoft’s commitment to providing advertisers with a highly effective means of reaching specific demographic groups of consumers in the rapidly growing and interactive medium of online gaming.

“Advertisers are having a tough time connecting with the elusive 18- to 34-year-old male demographic because this group continues to spend less time watching TV and more time playing video games,” said Joanne Bradford, corporate vice president of Global Sales and Marketing and chief media revenue officer at Microsoft. “Massive and Microsoft can help lead with our shared vision of delivering more targeted, measurable and effective opportunities for advertisers to reach today’s youth audience in a largely untapped market.”

The Commitment to Gamers
Massive and Microsoft will continue to prioritize gamer satisfaction, applying very rigorous standards to ads before they can be included in a game. These standards allow for only those ads that add realism and entertainment value to the overall game experience, not those that might detract from gameplay. Xbox has worked with Massive for more than a year and found that Massive’s technology, innovations and global gaming ecosystem are designed to ensure that in-game advertising is implemented effectively. According to research by Nielsen Interactive Entertainment, the majority of gamers find that relevant advertising enhances the realism of games.

The ad-funded model supported by Massive helps game developers deliver high quality and push the creative boundaries of video games to deliver the best gaming experience. It helps publishers offset the skyrocketing costs of video game development, which can in turn benefit gamers, keeping game prices affordable and opening the door to free gameplay, free content, tournaments and other possibilities.

Within the casual gaming space, Microsoft plans to implement Massive’s solution to extend in-game advertising capabilities to games on MSN and within MSN Messenger, delivering advertising solutions for the casual gaming audience of females 35 years old and up.

Taking Dynamic Ads Beyond Games
Microsoft also has begun exploring how to apply Massive technology to incorporate dynamic advertising into other online environments, such as Windows Live™ and MSN, and to make it available on the adCenter advertising platform. “We are committed to building an advertiser network that serves a wide spectrum of needs,” said Kevin Johnson, co-president of the Platforms & Services Division at Microsoft. “Our acquisition of Massive will expand opportunities for advertisers and enable connection to a broader audience of digital consumers.”

“Joining forces with Microsoft will allow Massive to deliver even greater benefits for advertisers, game developers and gamers through one of the world’s largest, most comprehensive online networks,” said Mitchell Davis, CEO of Massive Inc. “While our current business relationships will remain in place, with Microsoft we have the prospect of extending our technology into a vast array of new markets and online environments.”

I'm guessing there are some patents...