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Last Updated: Friday, 7 October 2005, 18:01 GMT 19:01 UK
Advert invasion in gaming world
Ian Hardy
By Ian Hardy
BBC Click Online North America technology correspondent

Within the next few months, the next generation of game consoles from Microsoft, Sony and Nintendo go on sale. Offering high definition graphics, the cost of producing new games for these machines is set to soar, meaning that gaming companies may turn to in-game advertising to fund them.

A man playing computer games
The average young, US man prefers playing games to TV
For several years now the number of eyeball hours spent in front of the TV has been dropping. DVDs, the internet and video games are the biggest reasons.

It has been estimated that the average 18-34 year old US male now spends just 27 minutes a night watching the small screen.

Video games command an average of 20 eyeball hours per week and many titles are more popular than the biggest television hits.

They also gross more money than movie theatres and record companies and is why the advertising world wants to invade consoles and monitors everywhere.

United Talent Agency's Jonathan Epstein who specialises in product placement within video games says: "If you watch how players play games it is a very different state of mind then you have when your are consuming passive entertainment.

In one of our last games, Splinter Cell: Pandora Tomorrow, we integrated a Sony Ericsson telephone into the game and it was very relevant to the subject of the game itself
Monika Madrid, Ubisoft
"They are very immersed into the game, so there are real opportunity for brand to connect with audiences in a way that may not be available with the TV or the internet, in print or elsewhere"

It is not new, but it is growing, and fast. No longer the odd race track banner here, the odd wall poster there, it is more sophisticated.

The biggest video game publishers have set up entire departments that work with advertisers to build in three dimensional objects, at the earliest stages of game design.

Ubisoft's Monika Madrid says: "In one of our last games, Splinter Cell: Pandora Tomorrow, we integrated a Sony Ericsson telephone into the game and it was very relevant to the subject of the game itself.

"The character had to interact with it, but it made sense to the plot. He uses hi-tech gadgets, so this hi-tech phone made sense, so there are new ways to look at it."

It is possible that gamers will one day be buried under a blizzard of messages and logos, but the advertisers and game makers are, for now, treading carefully arguing it lends a sense of realism to the games.

But they are well aware that advertising saturation is a major factor in the destruction of TV and radio audiences in the US.

Development costs

Publishers say the advertising revenue is crucial to their long term profitability.

Screenshot from Splinter Cell: Pandora Tomorrow
Ubisoft has integrated product placement into Splinter Cell
In the past few years the budget for an average game has gone from about $2m (1.1m) to $25m (14m).

Some in the industry already predict the most lavish games, for the next generation consoles could cost up to $100m (56m) to produce.

Massive Incorporated is a company that delivers advertisements on behalf of clients to video games in real time, known as dynamic product placement.

The company can precisely place and monitor the commercial in any geographical location. They can change the message minute by minute if needed and get instant feedback about the number of seconds a player sees it for and how often.

Soon Massive will debut their newest technology that takes advantage of broadband connections. It does not just replace posters on the walls, but the actual objects within the game, such as vehicles.

CEO of Massive Incorporated's, Mitch Davies says: "We can work with the car companies to launch a new car across 20 different video games in the month of October. And then in November we would show another car, real time, in those same 20 titles."

But many marketers in this field come from a strong background in gaming and realise there is a learning curve when it comes to this largely untapped marketplace.

CEO (North America) of advertising firm IGA Partners, Andrew Sispoidis says companies have to make "sure that the right brands are delivered into the right games to the right audience, in a way that ultimately adds value to the user and not only gameplay value, but to their lives to some degree."

There are literally hundreds of ways advertisers are getting involved in the video game world.

Some are making their own downloadable games based around brands and giving them away for free.

But perhaps the biggest concern that gamers have is that video games might be toned down in the future or simply not made for politically correct reasons once developers become reliant on advertising money.

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