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PC In-Game Advertising U.S. Market Forecast

Video games have become as much a part of the entertainment culture in the U.S. as movies and television, but publishers haven't capitalized on advertising opportunities to the extent of other mediums.

In 2005, U.S. Internet gamer households received about $0.10 worth of advertisement-supported gaming content on a monthly basis, compared to $50 worth of TV content. According to Parks Associates, PC in-game advertising will increase from $80 million in 2005 to more than $400 million in 2009. Today, most in-game ads exist in the automotive, food and beverage, apparel and lifestyle industries - advertising aimed at the so-called core gamers, males 18-34.

"In-game advertising, currently in its infancy, is poised to grow," Michael Cai, director of broadband and gaming said. "Games are now an important form of family entertainment. Advertisers will soon realize they can reach the whole family using this medium. More and more adults play video games with their children and teens are even playing games with their parents. In addition, the 35-54 female gamers, who spend tens of hours playing casual games every month, are undermonetized."

Parks Associates' market insights are based on "Electronic Gaming in the Digital Home," an online survey of more than 2,000 Internet gamers who have Internet access and play games at least one hour per month on a console, portable console or PC. Cai revealed the results of the survey at the Game Advertising Summit presented by the Game Developers Conference in San Francisco.

According to Parks' research, demographics groups vary widely in their perception of in-game advertising:

-Males 18-34 are more open to seeing advertising than other age groups - 29 percent say they would not mind seeing ads in games as long as it helps enhance game play, compared to only 19 percent among female gamers 35-54.

-However, the percentage of gamers willing to put up with ads in games if there is a chance to win prizes is similar among these two groups (38 percent among 18-34 male and 35 percent among 35-54 female).

Men and women also differ about what is the least intrusive approach to in-game advertising. Almost half of men 18-34 (49 percent) prefer product placement over pre-game ads (22 percent) and in-game bulletin boards (18 percent). Women 35-54 prefer pre-game ads (42 percent) by a slim margin over product placement (36 percent) and between-level ad placement (13 percent).

In addition, gamers revealed through the survey that they expect a discount on game prices in exchange for seeing ads and the expected discount ranged from 31 percent for gamers ages 13-17 to 58 percent for women 55 and older.

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