How do ads in games benefit gamers?
Joystiq reader "Pickypants" asked a great question earlier this morning in our post about Microsoft's acquisition of Massive Inc.
He asked, "how -- specifically in games -- will ads give a benefit to the end user?"
First, just to get this out of the way: we know that ads can be evil. We'll be the first to slam anyone that clumsily inserts advertisements into a game in such a way that it hurts the in-game experience. That's a given! But let's move past the issue by assuming for a moment that advertisers, developers and publishers are aware of gamer alarm over the prospect of in-game ads. These parties know that they'd be hurting their businesses if they were to bludgeon gamers with ads because the resultant backlash would dampen game sales.
Context laid, let's answer the question:
- Many beloved casual games wouldn't exist at all if it weren't for the opportunity to earn advertising money off of the traffic that these games generate for portals such as MSN.com, Yahoo.com and Shockwave.com. It's impossible to estimate how many game development jobs have been created because of the ad-supported content model, but we're certain that there are people developing creative, excellent games today who would not have ever had the opportunity to do that if it were not for money generated from advertising. Gamers benefit because more creative minds working on games equals more fun games (it also equals more crappy games, but we assume cream will rise to the top).
- If ad revenues keep developers afloat, then developers go on to create new games. How many promising projects have been cancelled because publishers cut a developer's funding? How many really creative people have left the industry after their studio went bust? More money from a wider variety of sources will support a bigger industry.
- What if Microsoft could make Xbox Live Gold free as a result of an ad-supported model? More gamers would use the leaderboards and other features that are exclusive to Xbox Live Gold, and more developers would be drawn into creating attractive and useful features for online use. It would be a self-reinforcing cycle. The in-game features that we see on Xbox Live today are somewhat half-baked, in part because developers have a hard time spending that much time and money developing features that only a small portion of the Xbox 360 audience will ever use. Leaderboards are easy. How about live ladders and tournaments? How about in-game pictochat? In short, the ad model can potentially drive gamers into connectivity. Connected, dynamic games can do way more cool stuff than static games.
- Realism can be enhanced through advertising. As Joystiq reader "Grindstone" put it, "I personally welcome in-game advertising. Not to offset costs, but to make the gaming experience more real. Obviously I wouldn't expect to see a Taco Bell sign in Oblivion, but I sure as hell wouldn't mind seeing a Subway being burned down in GTA, though."
Reader Comments (Page 1 of 2)
idioteraser @ May 5th 2006 2:09PM
Ahem the yahoo games adds as well as pogo are prior to loading the games and usually seen after every five play sessions. They aren't in the games themselves. Most people have gone to the paid services pogo and yahoo provide in order to not see ads.
Adds in those Sony MMO games such as planetside haven't really been of benefit and have been considered to have driven away a lot of players.
Vik @ May 5th 2006 2:10PM
They introduce another factor of reality into games, so long as they are valid. I mean the association you draw to an ad exists inside and outside the game world, therefore you've enhanced your immersion.
Other than that - I don't know how an add would benefit a gamer sans for ads that feature dating sites, carpul-tunnel ointments, and gizmos that make the ads look that much prettier.
Vik @ May 5th 2006 2:14PM
I totally forgot to mention munchies. As long as the ad targets the niche thats typically attached to games well enough - they benefit the gamer. Some ads, and tactics are better than others, but a product/service that benefits the gamer is usually a healthy start.
Vik @ May 5th 2006 2:17PM
Anyone remember the hilarious adds thrown into LucasArts Monkey Island games?
had2comment @ May 5th 2006 2:18PM
It's all about immersion.
If the ads help immersion, like driving a car by a Target in GTA, then great.
If the ads hurt immersion, like riding a horse by a Target in Oblivion, then no.
The tricky part comes when a company would otherwise be unable to produce a game but for the ads. Then, the question becomes whether the game is so good that it can be successful in spite of the ads which do not provide immersion, rather, solely exist to generate revenue.
32_footsteps @ May 5th 2006 2:20PM
"In the future, all restaurants are Taco Bell."
As this quote showed, advertising can go over the line into the absurd, silly, or stupid. Moreover, I think it's a very good question whether or not there's any benefits to the consumer to have such rampant advertising. (Does product placement push down costs of the game? Does it ever push down the cost of a movie ticket?)
Now, should something like Xbox Live Gold become free because of advertising, that would be a solid benefit for gamers. But do we have any evidence something like that has happened or will definitely happen? Unless there is, that's only a theoretical and shouldn't necessarily be used to say that ads benefit gamers definitely.
Finally, as for the comment about cream always rising to the top, the pessimist in me would like to point out that sewage floats too.
benjamin @ May 5th 2006 2:26PM
Indirect benefit via increased revenue for developers is the only conceivable advantage for gamers, as far as I can see.
As far a Xbox Live Gold going to free, ad supported content: I can only see that happening when and if Live ever gets any significant competition from Sony's Hub or Nintendo's VC. Until then, Microsoft can just sit back and pocket the additional income. In theory, I suppose they could go to a free model and use that to expand their user base.... but I don't see that happening.
Ken @ May 5th 2006 2:31PM
We (Acclaim) just penned an exclusive deal with Massive and I thought I'd chime in from our point of view. The ad model for us will be so that we can bring the TV-model to the game industry. Granted, it won't be for everyone. However, I believe ad-supported games will be consumed with a different mindset.
Right now, I think everyone is still thinking about ads in games based on the retail model. I buy a game for $60 and it's showing me ads, forget it! I totally understand the uproar surrounding that.
For example, if someone tried to show me a 30 sec. spot in the middle of a movie I paid for, I'd walk out and demand a refund. However, I don't mind watching a movie all day long on ad-supported broadcast tv.
But let's think about a whole new class of free games that are only ad-supported. Your post brings up all the good points about what ad-supported revenue could do for the industry. Almost every medium I can think of has benefited from ad revenue to increase content. Some of that content will be awful, some incredible but having the choice is going to be a great step for the industry. Overall, it's a win for everyone involved.
benjamin @ May 5th 2006 2:32PM
One very dangerous aspect of in-game advertising becoming the norm:
As it has been pointed out so many times, ads belong in some games and not in others. In the future this could mean that developing a racing or sports game, for example, could be much more lucrative than a fantasy or RPG type game.
Suddenly, there are 100 racers and 1000 football games and not a single decent RPG or adventure-type game out there.
Branewalker @ May 5th 2006 2:34PM
OK, I will acknowledge those as valid arguments. However, I would like to point something out:
Teenage and young adult men are currently the least likely demographic to watch television programming.
What demographic currently rules the market in videogames?
Now, I don't know about you guys, but the ad model on TV sucks. The price of advertising is based almost solely on ratings, which in turn drives the creation and approval of shows.
Let's put that in perspective. The reason Cartoon Network is showing programs that are not cartoons, is to appeal to a wider audience, raise ratings, and make more advertising money. The same reason applies to why they dub their anime--incidentally, I don't watch Cartoon Network anymore.
I could go on for a while about how this model sucks, but let me show you how this applies to why ads *in* videogames are a bad idea.
1. The product serves the Advertisement. Who is the paying customer in ad supported media? Right the advertiser. The product becomes little more than an enticement for the consumer to view the ads. "What would you doooOOOOooo...for a Klondike bar," essentially.
2. Advertisements in TV are skippable, but only if you record it and watch it later. Ads on DVDs don't make a lot of sense because they are easily skippable. Ads in games, however are recorded into that game in whatever way the developer pleases. IS there a choice to view them? Probably not if the advertiser has any say in it.
3. Ads are for the purpose of enticing consumers to buy a product. If I've already paid for a game, then ads do not belong there.
So, sure. There are good reasons to make money on advertising, but lets not kid ourselves, we are *truly* watching videogames become mainstream in this area.
--Branewalker
Probot @ May 5th 2006 2:36PM
I don't have a problem with ads on casual game sites, or free Xbox Live or ads that add to the immersion (when appropriate), but I have a question about the second bullet point.
Why is it better to have advertisers controlling dev money? Don't advertising companies have less interest in the games than the publishers do? Don't advertisers work with the publishers and not developers anyways?
What if the in-game ads don't generate the interest the companies want? Say the next GTA does have Subway ads, but Subway doesn't notice any increase in sales. Why would they bother funding another game?
And would Subway really allow Rockstar to blow up their store? Think of how many more rules would be made up to protect the advertiser's interests.
I'd like to hear more about exactly how this is all going to work. Just saying "some games will have ads" doesn't explain enough. I don't just want to know what and where the ads are, I want to know where the money comes from, who gets it, and how it's spent. Not an easy question to answer, I know, but I'm curious.
Vinh @ May 5th 2006 2:36PM
Do you really think that in-game advertising is going to reduce the cost of memberships or games?!? Think again. Now, we will pay the same amout of money for games and online subscriptions AND will see ads. Do you think that the game industry is going integrate advertising to break even by passing the savings onto us? I don't see that happening. Just my two cents.
funkonaut @ May 5th 2006 2:38PM
Isn't the point of advertising to keep consumer cost down? If games start including ads, then developers' revenue streams are less dependent on sales, which should result in lower retail prices.
Unfortunately, we'll never see that happen. Just look at movies. They're heavy with item placement advertising yet ticket prices continue to rise year after year with no relief in site.
Branewalker @ May 5th 2006 2:42PM
"The ad model for us will be so that we can bring the TV-model to the game industry."
Man, did I call it or what? *while* I'm writing my post on how ads in games are going to try to mimic the TV model, which has alienated most people who are gamers...
--Branewalker
Don Jose @ May 5th 2006 2:43PM
Ads in games do absolutely nothing for me. I play my fair share of EA games, and yet, at the same time, I totally hate Burger King.
hmmmmmm.........
jay @ May 5th 2006 2:49PM
Ads are only good for modern day sim games. The Sims, racing sims etc. I don't play those kind of things. I play games featuring worlds like Hyrule, Mushroom Kingon, Talon IV (is it?), Hoenn etc. Hell if I'm ever going to see an ingame ad :) w00ts.
John Lucas @ May 5th 2006 2:51PM
Ads don't belong in gaming.
End of discussion.
It's like having ads placed into music you want to buy.
TV & radio is one thing. Those are passive broadcast media forms. But active media forms like gaming NEVER should have advertisements within the game.
You would have opened a Pandora's box by letting that take root. And it will eventually dry up the industry.
Support Nintendo, folks. More than ever it seems that is the only company focused on the enjoyable experience of gaming and nothing else (except profit of course). The last true game company & system maker alive.
'Net parlor gaming like Yahoo games & MSN games & such it doesn't matter. A different business model.
John Lucas
Aly @ May 5th 2006 2:51PM
What pisses me off is how comapanies like EA charge the equivilent of $80 in the UK for their titles and flood there sports titles with advertising. I don't mind watching commercials or seeing adverts in newspapers but paying to watch adverts in games because it 'enhances the reality' - give me a fucking break.
The average consumer seriously under-estimates how much your time is worth and how much companies make from product placement .
Eric @ May 5th 2006 2:56PM
Well one thing is for sure, it doesn't reduce the price of next gen games!!
However, if I were running around clubbing hookers in the next gen installment of GTA and I came across a huge Starbucks that would be GREAT! It would bring me no greater satisfaction than to be able to go in a Starbucks, brought to you by in game advertising, and shoot everyone in it! (Jack Thompson disclaimer- But not in real life!)
funkonaut @ May 5th 2006 3:00PM
err, that's no relief in SIGHT.
scz @ May 5th 2006 3:01PM
$60+ads=BS
i love fight night as uch as the next guy but come one i don't remember seeing huge ass dodge signs while watching ali vs frazier (espn classic) games seem like
the last great place i can go with out being bugged to death about buying more shit, anyone been to a movie lately effin mc donalds commercials before the flick
Aly @ May 5th 2006 3:04PM
Sorry did i put $80? i meant $92. 2006 World Cup (EA title) features many 'realism enhancing' adverts and is on sale for $90!
Thats 50% more than the US and we have a 17.5% tax rate.
Lest we forget that the money that companies like Coca-cola or whomever pay EA to advertise in these games comes from us the consumer. So we have to pay twice!
Justron @ May 5th 2006 3:04PM
It's getting to the point where advertisements legitimize media. Sure, the extra money from ads allows better production values, but if a magazine like Maxim or something (Cosmo, if you will) didn't have any ads in it? That's part of the content, the experience, of the magazine itself.
These magazines sell a lifestyle, and the ads reinforce that lifestyle. If the ads in a video game reinforce the gamer lifestyle, they also add legitimacy.
It says "There are other people like you who are also willing to pay money for things like games and other products you care about" which in turn makes the user feel like something larger, like they're a part of the world.
Advertisements tie us together. They're a global constant. And hey, they give us something to talk about.
doup @ May 5th 2006 3:04PM
Do books have ads in??
32_footsteps @ May 5th 2006 3:10PM
"Support Nintendo, folks. More than ever it seems that is the only company focused on the enjoyable experience of gaming and nothing else (except profit of course). The last true game company & system maker alive."
To play devil's advocate for a moment, the very first time I saw an ad for a product within a game was back when Cruisin' USA came out (around 1995), and billboards in the game showed Kellogg's Corn Pops, with their slogan at the time, "Gotta have my Pops(tm)".
Now, in a driving game, it might make sense to have ads. But don't pretend that Nintendo is somehow above slapping advertising in games.
Moreover, I'd peg the Pokemon games as extremely likely to produce ad revenue in the future. Think of it - it takes place in a world with a decent amount of technology, so it's perfectly conceivable that they'd have some of the same type of products we do. On top of that, it's a guaranteed high-volume title, so you'd get alot of eyeballs.
Scoff all you want, but when your Pokemon is drinking Pepsi-brand Potions to recover life between battles, don't say you never saw it coming.
Kazi @ May 5th 2006 3:11PM
idioteraser, the reason the ads in PS scared people away was because they were annoying. WHY?!?! Because they thought it'd be funny to add sound to them too. Bilboards and such that fit into the enviroment of the game are fine. Annoying ones aren't.
TMoney @ May 5th 2006 3:12PM
I think that adding adds to games like GTA and not to games like Oblivion is a slippery slope. Its true I don't want adds in Oblivion, and don't mind them in GTA. Think about what this will do to the industry for a second. Since the game publisher sells these games for the same price and for the sake of argument lets say these two games sell the same amount of units. GTA will get a certain amount of extra revenue becuase of its ads. Oblivion on the otherhand will need to be completely supported by purchases. Which do you think the publishers will choose to produce next time. I don't want to loose my Marios, Zeldas, Elder Scrolls, Metroids, ect. because they don't bring in the add revenue that can be squezzed into modern day set realistic games.
benjamin @ May 5th 2006 3:14PM
doup: yes. Books do. Textbooks, anyway. This is done in 2 ways. The publisher plugs their paid website for "online help" in hundreds of places throughout the text. Also, the bookstores where you buy these books place ads between the pages. You can't buy a textbook from my school without an ad for magazine subscriptions in the front cover.
Unfortunately, no media is free from advertisers.
benjamin @ May 5th 2006 3:17PM
Jay:
"Ads are only good for modern day sim games. The Sims, racing sims etc. I don't play those kind of things. I play games featuring worlds like Hyrule, Mushroom Kingon, Talon IV (is it?), Hoenn etc. Hell if I'm ever going to see an ingame ad :) w00ts."
You sound like you think you won't be affected. That's exactly the point I was trying to make in my above post. The games you like aren't inherently the games that get ads placed in them, right? So now what happens when developers choose to stop making the kind of games you most like in favor of these "sim" games because the advertising opportunities in these games is higher? Where does that leave you?
Alan @ May 5th 2006 3:18PM
Are Americans more used to being bombarded with adverts? 10mins per hour of TV over there is adverts as opposed to 6-7mins here. We are slowly catching on with naming sports stadiums after companies however and our top football (soccer) league is called The Barclays Premiership.
I wanna see how shameful they get with games, i remember almost vomiting when i went to see I, Robot and Will Smith announces that hes wearing "Converse 2001 Vintage" or something like that.
I cant wait to see Solid Snake tell me about the great new price plans from T-mobile
Mal F4cti0n @ May 5th 2006 3:25PM
Hey idioteraser,
No sh*t, Sherlock. VC was explaining how ingame adds will help the end user by comparing the benefits of adds for free games as they exist now.
Reading Comprehension 101, dude, re-read, stop, think and if it still doesn't make sense to you, don't post a stupid comment.
Andir @ May 5th 2006 3:28PM
I think the fact of the matter is that this is MS, they don't want to put ads in games to make them free...they want to put ads in games to make more money. What's to say they stop producing RPGs and go for the street racer market more because the ads fit better in the race game than they do in the middle of the woods.
benjamin @ May 5th 2006 3:28PM
TMoney: exactly what I was saying above (#9). Everyone thinks that these games will not be affected but they are exactly the games that could very possibly take the biggest hit. Glad someone else understands that.
32_footsteps @ May 5th 2006 3:28PM
Actually, Alan, television advertising frequency is worse than you think in the United States
Currently, networks allocate around 16 minutes per hour for commercials - this is consistent with both cable and network television. This is on top of bumps running on the bottom of the screen (almost always for other shows on the network) which probably run for about 60-90 seconds per program and the fact that credit sequences are often minimized (making it damn near impossible to actually read them, for those of us who care) so that the other half of the screen can run additional advertising.
If you factor in the bumps and the minimized credits, I'd feel comfortable saying that a full 1/3 of television airtime is advertisements at this point (about 20 minutes per hour). Consider that even as recent as ten years ago, that number was half as large (about 10 minutes per hour).
Justin @ May 5th 2006 3:31PM
The ESRB is going to need a new Content Descriptor for EA and those that follow in their footsteps:
"Tasteless In-Game Advertising"
There will be no benefit to the the end-users from in-game ads (in traditional retail games) and anyone who tells you otherwise is either naive or stands to profit from them. Personally I have enough advertising shoved in my face already each day and I'd rather spend the $50 a year for Xbox Live Gold than have to look at animated GIF banners for Axe Body Spray while waiting for Ghost Recon to load.
Aesop @ May 5th 2006 3:35PM
Yeah when the bbc (no advertising) used to show the Simpsons it would only last for 20mins and 24 runs for about 40 to 45-mins
benjamin @ May 5th 2006 3:40PM
Andir: Read my post #9. Give me some credit, man!
Prof-KOS @ May 5th 2006 3:44PM
This is a tricky topic. There are many different factors to consider, not just immersion.
The first is money. TIVO's are becoming hugely popular and advertisers are suffering. So they've started puuling spending away from TV and into other mediums. TV advertising is US$200 Billion industry. That money is earmarked in budgets in the major advertisers and will be spent somewhere. Title sponsorships of sports events, Sports events, etc... One of those places is in-game advertising. This is important to remember because this is going to really swell up. Now can we count on Developers and Publishers to make the right decisions when corporations are literally throwing millions of dollars at them. I'm not so sure.
The next thing to consider is immersion. It is important. Walking past a Burger King will evoke a much different response from me in a Mario game than driving past in NFS. That's because it works in NFS. It makes sense. Developers and publishers know this, but will they willingly let a title die from lack of funding 50% of the way through rather than surrender their ideals.
Adrocknaphobia @ May 5th 2006 3:48PM
People may be upset with in-game advertising, but no matter how bad it is, it wont prevent gamers from buying the blockbuster titles like Halo 3.
The Affable American @ May 5th 2006 3:49PM
#9: Great point. But what about loading screens? A lot of RPGs use loading screens for strategy tips or additional information. By hour 5, you have already memorized most of these. Ads could fit in nicely...
Prof-KOS @ May 5th 2006 3:49PM
32 footsteps. You're right about 1/3 of airtime being advertising. What's happening though is networks are selling the time while the show is on-screen (top or bottom of screen) as an added value to keep major advertisers buying airtime. TIVO is really hurting that industry. Several industries will be hurt by it as well. Even Pay TV channels now have to make sure they have great content because people aren't going to just pay for no ads anymore.
Aly @ May 5th 2006 3:49PM
I'll repeat EA's Gen 1.5 XBOX 360 advertising-laden very average games are 50 ($92!!) in the UK. The title of this post is how do ads in games benefit gamers? They don't.
Clay @ May 5th 2006 3:50PM
As long as they stay realistic. An example of what not to do is Burger King and Fight Night Round 3.
Thryon @ May 5th 2006 3:55PM
Why are ads such a bad thing all of a sudden.
We all pay good money to go and see the latest summer blockbuster that is chocked fill with product placement. Can you think of one movie, in the past year, that did not feature Pepsi or Coke. When was the last movie to feature a computer or laptop that was not angled in a specific way as to display the Apple logo.
Why I will even bet that your own cars are covered with delearship logos....nothing more than ads.
I recently purchased a designer t-shirt. This was nothing more than one giant ad on the front for their brand name. This shirt cost me over $40. The thing is that I did not expect a rebate on the shirt because of this. It all comes down to my personal choice in purchasing these products.
Ads can be good in several situations.
*If the ads allow the developer to subsidize a procut or service to keep cost low or free (like they do for magazines and newspapers), then ads would be a welcomed addition.
*If the ads enhances the reality of the final product, then I support them 100%. It would be strange to see a hockey game, and not see the boards and ice covered with ads, as this is what I would expect to see in the real world when enjoying a game.
*If the ads do not interfere with the actual game itself. Maybe appear on the loading menus.
PC games have been displaying ads for a long time now. When you install the game, often you will see advertisement for other games offered by the same company. This is nothing new.
Prof-KOS @ May 5th 2006 3:55PM
As for Xbox Live Gold memberships for free. That will never happen unless they get great pressure from Sony and Nintendo. The reason there are levels at all in the online service is that MS sees Live as a revenue stream. Why would they give that way for free. This is the same company thinking about finding a way to make you pay per hour of use of Windows. They'll investigate any source of revenue, but they won't give one up. That's just bad business sense.
KingOfGods @ May 5th 2006 3:56PM
I'm all for the ads as long as it's not too intrusive...like having to click an ad to continue playing the game or continue playing on live.
One of the things we seem to forget is that the prices to develop games has not come down but gone up. These companies will have teams of people working to get a game ready and this cost money.
If the ads in these games helps the publishers and the developers recoup the money used to make these games then I'm all for it.
Look at companies like Majesco and there game Psychonauts. I never read or heard one bad thing about this game but it sold shit. If in game ads would have helped Majesco recoup some of those dollars they might still be developing games like Demonik and others that got cancelled.
**Keep the ads to a minimum**
Chris @ May 5th 2006 3:57PM
For anyone who believes Nintendo is above product placement, just look at Pikmin 2. Granted, though, it was used to great whimsical effect and helped to solidify the underlying "secret history" of the pikmin world.
sc0ttyb @ May 5th 2006 3:57PM
Could I have just ONE form of entertainment free from advertising? Just one? Please?
Radio has ads. TV has ads. Papers have ads. Magazines have ads. Web sites have ads. My games? Currently do not have ads.
What's next, ads on parking space lines? Oh, wait. Here it is: http://www.parkingstripe.com/
benjamin @ May 5th 2006 3:58PM
The Affable American: I thought of that too, but aren't we trying to move away from the whole loading screen annoyance? Nintendo consoles have always had very brief loading screens, almost not enough time to display an ad in most cases. Also, let's say you place an ad in a loading screen during Oblivion. That, to me, would be a perfect example of an ad being disruptive and interfering with the game's feel. I always thought that if a game requires loading screens they should be done artistically to enhance, rather than detract, from the environment. I, for one, would feel that this type of ad placement would be very intrusive. Also, if many people felt that way, sales could decline thus negating any benefits the advertiser may have expected. So, no, I don't think that loading screens are usable for non-modern world games.
CAP @ May 5th 2006 4:01PM
Great comments everyone. I agree with most posts here and highly doubt the end consumer (gamers) will reap any benefits of in game ads. On something like xbox live maybe. But I would bet the game prices won't come down when ads are in them. That cut will probably go to the publisher or some other party involved, not the consumer. That may sound cynical, but that's what we are used to with corporate america. I would love it if they prove me wrong and bring prices down because the last few games I have purchased cost me $75 after tax. That's not a drop in my bucket. I don't want to shell out that kind of cash and have a bad gaming experience with product branding all in your face, it should definitely be done with some tact. Those are my thoughts on which could be a very touchy era in gaming.