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Sony Getting into In Game Advertising

sony in game adsSome analysts are forecasting the gaming industry will grow 9% per year to $47b by 2009. The fledgling In-Game advertising industry earned a meager $55m last year but riding on the backs of the gaming world’s growth, it too is expected to explode; reaching upwards of $2b by 2012. With that scale and growth it’s only natural to see the 800lb gorillas of gaming and advertising getting involved.

Today, Sony (Corp of America “SCEA”) took the plunge and announced they too were getting involved. To plot strategy and explore the space, Sony created a unique division. Darlene Kindler, who was an early executive at Nintendo and recently the VP of Publishing at Google acquired in-game advertising Adscape Media, will helm the unit.

In-Game advertising has been profiled before on Metue. It’s not a new concept. It dates back to product placements that put brand labels inside gaming. But in today world it’s becoming dynamic. It can be updated, tracked, and changed on a regular basis. The way it works now: networks like Massive (bought by Microsoft a year ago for $200m), or Adscape Media ( bought by Google for about $23m) or IGA , work with advertisers and game developers to serve two and three dimensional ads.  It’s different from Internet advertising in that ad creative may take non-standardized forms. But taking advantage of the Internet connectivity on modern consoles, so long as a console is connected, the ad firms can stream and vary the advertising within an individual game just as do online within an individual website.   A billboard in the background of a driving game?  Today it can showcase an ad for public service Safe Driving. Tomorrow, if an advertiser has paid for the impressions, it can show an ad for the local Ford or BMW dealership.

The launch of Sony’s new division follows an announcement from SCEA’s this summer that they were partnering with Nielsen Media to focus on developing systems to measure and track in game advertising. Taken together, it looks like Sony is getting serious about the market opportunity.

Whether Sony will serve ads for the Playstation platform in a way similar to Microsoft’s effort on the Xbox via their Massive subsidiary is not yet clear, though likely. In an house ad-delivery service allows them to virtually insure strict control of in-game streams to games on their own console. It has the potential to undercut third party providers like Google’s Adscape or Double Fusion.

The market is still early and a lot is in flux. The core takeaway point is none of the big players are waiting to see what happens. They’re all jumping in, or there already.

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