As multiplayer becomes more integral to the value of a video game and as story lines continue to become more complex, I conjecture that in-game advertising will not be the holy grail of additional revenue streams for video game publishers, developers and sponsors.
Before you start throwing your heavily branded Coke can my way, I will disclose that I work for a company Titan Gaming Inc. that creates additional revenue streams around video games. I should also mention that by in-game advertising I mean in-game billboards and in-game ads that are not interactive.
I do believe that The Holy Grail for publishers is being able to tap the community that is born around their game in an organized fashion and provide value-added services through a framework that enables this community management. Currently one sees grassroots communities, clans, individuals spending hours, days, and years participating in these communities that encircle one game. What if the publisher or developer could create an official space where these individuals could network, see new product offerings from the publishers and participate in engaging sponsor-driven tournaments that provide a value-add for customers, sponsors?
I will start my argument by looking at the shortcomings of in-game advertising, and then shift my argument to other more pervasive forms of advertising around games, then follow with an analysis of the current community solutions available for publishers and developers.
Coke Machines in Halo 3
When we speak to developers and publishers one of the best ways to convey the shortcomings of in-game advertising industry is to say “You can’t put a coke machine in Halo 3”. As mentioned before, some games are not suitable for in-game ad-placement due to the game’s setting of time and place. It’s hard to conceive of real present-day brands such as Mountain Dew appearing in a clash of alliance versus hordes in World of Warcraft or a Black and Decker hammer in Age of Conan. It’s hard to imagine a publisher or developer feeling comfortable destroying the setting of the game by placing an ad for an extra $2-$3 per game sold.
Nike next to Adidas
The next inherent issue is the lack of real estate space available in-game. When you’re driving to school or work, you will rarely see a Nike and Adidas billboard next to each other. You will however see these ads on television; and the assumption is that they spend money on the television more because of the kind of attention you are placing towards the television as the commercial starts. This differs from the kind of peripheral attention you would place on an ad while you’re driving down the freeway. Better shows that attract more traffic get higher ad rates. Duh. But now let’s draw a comparison between games and television shows. Commercials are extended and often engage the viewer for an extended period of time. An in-game ad placement is often seen as a distraction to the gamer unless it offers a level of interactivity. If I receive a Black and Decker hammer in a Sims game after building 12 successful Sim communities then there is a positive brand association created. There needs to be some level of value associated with virtual sponsored goods in order to draw a positive brand association. The interactivity of video games allows advertisers to be more creative and focus on building a positive brand association and not just a cool banner ad. This strengthens my argument, that in-game ad placement is not the most valuable additional revenue stream for any of the parties (developers, publishers, gamers or sponsors). The real value in-game is creating sponsored goods, worlds, levels to create positive brand associations. So as a gamer, after I’ve played I can say “My favorite level was when I had to save Target from the evil aliens.” This is Target’s dream, to create a positive and interactive association between a brand and a customer.
For the multiplayer games where the sponsored goods or levels aren’t available the next step is what surrounds the game – the community, sponsored tournaments and banners in lobbies. I’ll start with the sponsored tournaments since it’s one of the more complex but rewarding options available for game developers and publishers. We’ve created a tournament system that lets developers and publishers create an additional revenue stream with the following features:
- Prize management and escrow service
- Player schedule and re-schedule
- Game server load balancing
- Demographic targeting
- Analytics
Titan Gaming Inc.’s goal in creating the tournament module was to allow developers to integrate their game into the tournament engine with as few lines of code as possible. The tournament module also had to be as flexible as possible to accommodate any multiplayer console, casual, PC game that has a win, loss logic. There is a complete dispute, scheduling and tournament tree set up that makes it a turn key solution. It’s a valuable tool for developers because they can plug and play the module with the community solution and allow the ecosystem of sponsored events, user-generated content to flourish. Since the Coke machine could not be embedded into Halo 3 we’re creating positive and extended online campaigns with the tournaments. For example, the sponsor might want to give gamers free entry after an ad pre-roll. The monetization of the tournament is all controlled through a backend interface. The approval process is also controlled through the backend using the Titanstrike framework. Have any ideas to improve online tournaments, I’d like to hear about them at diaz*at*titangaminginc.com.
The lobby system is very simple and non-interactive way for developers to gain some extra revenue. Ads would be placed in or around the server browser of a game.
Moving beyond the in-game experience is the possibilities of tapping into the power that occurs when a community is born from a game. Traditionally, publishers and developers simply put out the game and let the communities form on their own with little or no interaction but this is starting to change. From what I’ve seen, the current community solutions for video game publishers follow three fronts. First, online video game communities are built using an open source solution like Joomla or Drupal. Second, the community solution is outsourced to a company like Gamespy. Thirdly, the publisher realizes the value and decides to build their proprietary community solution. Inherently, there are shortcomings to these three options.
Using an open source solution like Joomla, creates a robust environment for gamers but it follows a cookie-cutter approach. Joomla was not meant to be used as a community solution, let alone one with integrated game services. Joomla has great news and user management but falls short when creating a solution that creates a solid bridge from the web to any game.
The next option is probably the most popular one, outsourcing the community solution to a company like Gamespy. The positive aspect of this is that there are plenty of game services with web enabled components, there is an installable re-skinnable component that can be used to create the look and feel of that particular game. However, one of the shortfalls is being able to tap your community and extend your upcoming pipeline to the community. I’ve visited many game communities hosted on Gamespy and I see a gap. The gap is that Gamespy’s advertising interests are not in-line with the game publisher who is outsourcing their community. Gamespy wants to host communities and advertise upcoming pipelines from any company that is willing to meet their rates. A publisher’s goal is to incubate their communities and market upcoming titles to that base. If they have access to their community, the database, traffic, they need to spend far less to create a sale on their next title.
Let’s take a look at the Battlefield Community site. On any given day, you’ll see a different ad underneath the header that demonstrates that it’s the Battlefield community site. Today (July 07,2008) I see an Alone in the Dark Advertisement with an Atari emblem. I know that video game publishers are used to being perceived side by side at retail stores but the online community could be used as an important conduit for upcoming games. Now let’s look at Bungie.net, the makers of Halo 3:
Halo 3 Community Site
No advertisements carrying the competition’s brand, slogan or game. This is a tight-knit community where a Halo 4 ad would be well received and the marketing budget would include the hosting and production fees for the advertisement and not a large premium to reach their community base. I hope by now the benefits of publishers and developers creating and holding onto an official community with full control is clear. The caveat with the Bungie.net (Halo 3 Community Site) is that it's a proprietary solution, its expensive to build around each game and from my knowledge they aren't in a position to white-label it for your game. Nevertheless, giving your customer to an agency that doesn’t share the same goals as your game is a dangerous move.
The Titanstrike framework was designed with flexible APIs on the frontend and integration end in order to be a cost-effective, customizable solution. If you would like to see a demo of what a community and tournament solution would look like around your game, please visit our official site http://www.titangaminginc.com or contact me at diaz@titangaminginc.com
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