Advertising Industry Changes Course - Video Games vs Movies

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18 January 2007 15:25 GMT

By G. Wolfe and J. Brace

Advertising Industry Changes Course

        For the first time since their introduction, year on year sales of movie DVDs were less in 2006 than in the previous year. Hollywood’s “Golden Days” of box office receipts also appear to be coming to petering out. The Hollywood Reporter reported the film industry's total market share increased barely over last year’s £4.56 billion (US$8.99 billion) with this year’s showing of £4.79 billion (US$9.44 billion) - a ~5% increase.

        The television industry is the hardest hit of all. Jim Benson of Broadcasting & Cable said that the TV syndication people are showing reluctance their new ’07 program offerings. This past Autumn, all but one of the program categories, showed marked declines, mainly double-digit declines. The only category that did not suffer a decline in popularity was game shows.

        So, to what are the sought after demographic groups (especially 18-34 yr old males) doing instead? It’s video gaming - especially online video gaming. In 2006, a record year for gaming; hardware and software sales combined exceeded $12.5 billion, settling once and for all any dispute regarding the the winner of the Hollywood v. Gaming Industry revenues debate. Last June, Microsoft reported Xbox live had hosted over five hundred million full games of Halo and Halo 2.

        Research firm, In-Stat predicted that from ’05-’10, online subscribership will increase 40.8% for consoles and 94.2% for handhelds. Parks Associates research feels those prediction are too conservative - with their own research predicting a rise in online revenues from £558 million (US$1.1 billion) to £2.23 billion (US$4.4 billion) in the same time period. As of December 2006, Vivendi’s World of Warcraft global subscribership reached eight million.

        We seriously doubt these consumer migration trends are going unnoticed by Madison Avenue and all the top advertising firms. It’s their business to track down and capture the elusive “consumer with purchasing power”, wherever he or she may be. The livelihoods of corporations like Coca-Cola and McDonalds are counting on them.

        So it is our opinion, that the relative “free ride” gamers have enjoyed so far, may be coming to an end. One of the earliest examples of this trend in America, was in the form of Burger King’s ‘The King’ ad placement in boxing games and in mini Xbox 360 games that they distributed in their restaurants. Those who remember the Amiga platform in the early 1990s and Zool will maybe also remember Chupa Cups lollipops in the background.

        Microsoft would appear to be positioning itself more intelligently than anyone in trying to make Microsoft more of a lifestyle choice rather than a software/OS choice. The Xbox Live Marketplace just exceeded fifty million gaming and entertainment content downloads. That milestone is astounding, considering that they only got to twenty five million mark subscribers only three months ago.

        Price-Waterhouse Coopers and the Interactive Advertising Bureau reported Web advertising sales in the US alone, topped £4.87 billion (US$9.6 billion).

        Two of the key players to watch in the new arena of in-game advertising are IGN Entertainment Inc (a unit of Fox Interactive Media Inc) and Massive Inc. However Massive Inc is preferable when it comes to advertising in video games. There is integrity in their purity of focus and so far, their advertising in games like Splinter Cell:Chaos Theory has been tasteful and non-obtrusive. IGN claim to be an unbiased, objective reporting and review source. With millions of dollars in advertising revenue at risk, when the desire for greater profits is weighed against integrity - usually the former wins. Already one of IGN’s editors has been censured for writing too harsh of a review of a client’s game.

        At Level 80 we faced similar requests for a rewrite of a game we reviewed called Sacred. However we stood by the original reviewer and refused to alter the tone of the piece to make it more positive as it accurately described the game supplied on the PC system, as well as the technical problems faced with the system it was tested on.

        However due to the variety of PC systems out there - it is perhaps unfair to expect a game to work the same way on them all when the console market is more homogenous. A second reviewer concurred with many of the original reviewer’s points. Bowing to pressure to edit an article to make people more likely to buy would have affected our journalistic integrity.

        We are however happy to change any article that is factually inaccurate - however everyone is entitled to their opinion.

        What this will mean to us as gamers, is as yet unknown. There are potential pros and cons. On the plus side, players can look forward to increased development money being invested in the games and the overall production values improving. On the downside, editorial content may be distracted from with inappropriate advertisements, as well as honesty in reviews being severely compromised due to financial concerns.

        Only time will tell how this one plays out.

Written by Gregory Wolfe of Video Game Locker.

Edited by John Brace (Level 80 Editor).

Conflicts of Interest: IGN Entertainment Inc is currently an advertiser on Level 80.

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