• by August 23, 2007

Driven by the ability to dynamically serve advertising into video games connected to the Internet, in-game advertising on consoles will grow more than tenfold from $80 million in 2007 to $850 million in 2011, according to ABI Research.

The figure echoes trends found in recent research from Parks Associates and Yankee Group. Parks projected that total in-game advertising will grow from $55 million in 2006 to more than $800 million in 2012--with dynamic in-game advertising (in PCs and on mobile, as well as consoles) growing from 27% of the total to 84%. Yankee said the in-game market will grow from $77.7 million in 2006 to $971.3 million in 2011, and that dynamically placed ads will cannibalize static in-game ads.

"In many ways, console vendors and game publishers view gaming services as an ever-more attractive 'channel' to reach an active demographic," said ABI Research Director Michael Wolf. "In the past, static advertising meant that publishers and their ad partners could not create real-time marketing messages. With the incorporation of ad clients directly into game engines--and through connections to ad servers--advertisers will be able to deliver advertising that reaches audiences in-game and through the walled garden game network."

The new ABI study, "Console and Handheld Online Gaming," added that that the conversion of console gaming into connected gaming will also drive a tenfold increase in revenues from game downloads--from $93 million in 2007 to $1.1 billion in 2011.