Slowly--ever so slowly--game makers have been coming up with ways to make advertising an effective way to reach their devoted audiences. Hard-coded ad and product placements have been around for
years, but they haven't generated substantial revenue, as most advertisers still haven't been sold on the idea that video games are a viable place to buy ads. Technological problems have also hampered
the growth of what many game developers believe could one day become a substantial revenue source for them. Revenue from in-game advertising was just $56 million in 2005, according to the Yankee
Group--but that should rise to $732 million by the end of 2010. Some feel that dynamic in-game advertising, which enables publishers to insert ads in online-based games or online-enabled console games
on a rotating basis, could move video game advertising into the mainstream. Microsoft, of course, recently purchased Massive Inc., the largest independent server of dynamic in-game ads. Kevin Browne,
the GM of Xbox new media and franchise development at Microsoft, admits that it will take a long time for this type of advertising to become a significant revenue driver for the Xbox360. "There is a
ton of work for all participants in this ecosystem before we can call this advertising," he said.
Read the whole story at San Francisco Chronicle »
