Ready Player One: Advertising in video games has pros and cons

Electronic Arts recently released an upgrade to the new “SimCity” game that will add the Nissan LEAF to its inventory of cars. It’s an obvious attempt to lure potential car customers, and it got me thinking about advertising – the good and the bad.

Advertising is a huge revenue source for film and television, but more and more ad agencies are eyeing video games as a relatively untapped source of marketing revenue.

It’s natural in many settings, and you’ve probably noticed advertising in your favorite games already – racing titles where billboards line the track, sports games where advertisements surround the field, obvious choices.

There are also more subtle placements – vending machines in the background of zombie games and brand-name food products to boost your health in others.

Spending on game advertising has gone up exponentially in recent years, and in 2010 it was reported at reaching $3.1 billion. By 2016 that number is expected to increase to $7.2 billion.

In 2008, then-presidential candidate Barack Obama spent millions of dollars campaigning for the election, and some of that went into purchasing ad space in video games. The Obama campaign placed ads in nine of EA’s video games, including the popular “Madden NFL” series.

The ads came in the form of in-game stadium signs and billboards, and they are a perfect example of dynamic video game advertising that is able to target specific subsets of consumers.

Developers of mobile games have been taking advantage of this flexible marketing strategy. Developers will make simple games where you’ll have to grow crops, for example, and all the while there are ads placed everywhere. And just in case you didn’t see those ads, there are advertisements for things to buy in the game itself.

Can you imagine the guys over at Zynga? They must have wept tears of joy when they realized they could sell a virtual top hat for real-world cash.

So what does this mean for you? Well, good and bad things, depending on how you look at it.

Selling ads will allow projects to be better funded, hopefully resulting in better games. But the real potential lies in cheap or free games.

Already there are games available on mobile devices that come in two variations: it’s free, but has lots of ads, or it costs a small price, but is free of advertisements.

I actually really like this model. Sometimes I think a game is worth buying in order to get rid of the ads; sometimes I don’t, and I love being able to make that decision for myself. This model may spread to console games, at which point many titles could become cheaper and available to a larger crowd.

However, if the in-game advertising is not done right, the ads will easily get distracting, taking away from game play and ultimately resulting in a loss of revenue for the game developers.

A subset of advertisers will naturally develop from in-game advertising, and being able to integrate marketing naturally will become a highly prized skill. Just like how movie advertising evolved, so will the video game market. Advertising executives will be like marketing ninjas, inserting products into games so subtly that we won’t even question our sudden craving for a Dr. Pepper.

I realize this is an inevitable development for the rising game industry, and I’m fine with in-game advertising so long as it’s reasonably natural to the game’s setting. That means that if you’re going to set your game on a foreign planet, I better not see a billboard for Colgate toothpaste.

In the coming years, as in-game advertising becomes more prevalent, developers will have decisions to make. The ads will either work or they won’t, and hopefully game developers will have the restraint to know when to say no.

Sorry Bethesda, but a McDonald’s just isn’t going to look natural in the land of “Skyrim.”

Email Gilvezan at [email protected]. Send general comments to [email protected] or tweet us @DBOpinion.