The revelation that the immensely popular Grand Theft Auto: San Andreas contained within it locked, hard-core sex scenes, which were unlocked by a Dutch gamer--a scandal dubbed "Hot Coffee"--surely gave some advertisers pause about putting their brands in a video game. After all, if a game could have hidden content that would associate their brands with all manner of immorality, how could a brand retain control of its image, its message?
But much like on the Internet as a whole, however, this hope to control a brand or a message is, in the end, futile. When your client or your firm puts up an ad on the Internet, the field is open for a Photoshop-wielding legion to express their views on your product, be they positive or negative.
Just so, if you advertise in a game, you run the risk of seeing your brand used in manners that shock or appall you. It doesn't matter if the designers hard-code in something that will damage your brand image--gamers can do it just fine themselves. If your logo appears on an in-game storefront, you should not be surprised if that storefront is demolished. If your product is an automobile, placed in a racing game, you should be prepared to see your high-performance vehicle mangled to the absolute limits permitted by the game's designers. If your advertised product displays any significant flaws at all, you should be unsurprised if the gaming community derides those flaws in a vocal and creative fashion.
It is a maxim of video game design that, if you make something remotely possible within a game, some player, somewhere, will do it. With the rise of machinima--movies created using game graphics and animations--and easily shared broadband video, it is becoming more and more likely that, when they do it, it will appear on YouTube. And with the rise of the modding community--a group of dedicated gamers and tech geeks who reprogram games to add new features or content--even things not intended by the games' designers can be done in-game.
The upshot of all this is, no matter how careful a brand advertiser is in selecting where and how their brand is displayed in a video game, dissatisfied or irate customers will be able to take a shot at them. This issue of brand control is not confined to controversial games like Grand Theft Auto; it is a product of the existence of consumer-generated media, and no amount of caution will make it go away. If your firm is considering in-game ads, and brand control is a cause for hesitation, then you might as well take down all those 350x250 displays, too. They're in just as much danger.