In-Game Advertsing - Global Strategic Business Report

This report analyzes the worldwide markets for In-Game Advertising in US$ Million. The report provides separate comprehensive analytics for US, Canada, Japan, Europe, Asia-Pacific, The Middle East, and Latin America. Annual estimates and forecasts are provided for the period 2009 through 2017. Also, a six-year historic analysis is provided for these markets.

The report profiles 35 companies including many key and niche players such as

- Blockdot, Inc.
- BlueNoodle / NeoEdge
- Double Fusion, Inc.
- Electronic Arts Inc.
- Google Adscape Media
- Gaikai Inc.
- Game Creative Pty Ltd.
- Greystripe
- IGA Worldwide
- Intergi Entertainment
- Mochi Media
- Tap M! Inc.
- WildTangent, Inc.
- Yahoo, Inc.

Market data and analytics are derived from primary and secondary research. Company profiles are mostly extracted from URL research and reported select online sources.

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1. INTRODUCTION, METHODOLOGY & PRODUCT DEFINITIONS 1
Study Reliability and Reporting Limitations 1
Disclaimers 2
Data Interpretation & Reporting Level 3
Quantitative Techniques & Analytics 3
Product Definitions and Scope of Study 3
In-Game Advertising (IGA) 3

2. INDUSTRY OVERVIEW 4
Market Snapshots 4
In-Game Advertising - Current and Future Analysis 4
Current and Future Analysis 5
Table 1: Global In-Game Advertising Revenues (2010)
Percentage Breakdown by Major Market Segments - Online Games,
Home Console, Offline Computer, Handheld Console and Mobile
(includes corresponding Graph/Chart) 5
In-game Advertisements - Inexpensive, Measurable and Effective 6
IGAs Notch the Highest Ad Recall Percentage 6
Table 2: Ad Recall Average Percentages for Various Media
Forms (includes corresponding Graph/Chart) 6
‘Integrate' not ‘Interrupt', is the Mantra for Success for In-
game Advertisers 7
Vertical Expansion of IGA 7
IGA Not Suitable for Niche Products 7
IGA Not Just for Corporates 7
Gaming Industry Witnesses A Shift in Demographics 8
In-game Ads Eye Social Networking Games 8
Social Networking Games Help in Brand Promotion 8
Table 3: Top 10 Social Networking Websites (Mar 2011):
Ranked by Number of Visits(includes corresponding Graph/
Chart) 8
Social Gaming Industry Governed by Varied Business Models 9
Few Big Advertising Agencies Hold Opposed Views 9
Tracking and Assessing In-game Ad Effectiveness 10
What Constitutes an Impression - A Million Dollar Question 10
Standardization is the Need of the Hour 10
Ranking of Key In-Game Advertising Drawbacks 11
In-Game Advertising - Pricing Models 11
Online Advertising Market 12
Table 4: Worldwide Advertising Market (2010): Percentage
Breakdown by Media -Television, Newspapers & Magazines,
Internet, Radio, Outdoor & Others and Cinema (includes
corresponding Graph/Chart) 12
The Regulatory Environment 12
IBA Guidelines for IGA in Console-based Games 12
Mobile Game Advertising 13
Table 5: Global Market for Mobile Games Advertising
(2008-2011): Breakdown of Market Value in US$ Million by
Geographic Region - US, Europe, Japan and Asia-Pacific
(includes corresponding Graph/Chart) 13
Advertising in Mobile Games - Few Facts 13
Recession and the Larger Advertising Industry 14
Ad-Spends Increase as Economies Recover 14

3. IGA - MARKET TRENDS AND ISSUES 15
Advertisers Leverage High Internet Traffic through Free Online
Casual Games 15
Games Become Shorter, Command Advertisers to be More Innovative 15
Big Advertises Pursue an Integrated Strategy for Advertising 15
More Marketing Dollars for IGA from the Sports Category 15
Developers Move Advertising In-House 15
IGA in the Race to Become Mainstream Revenue Source for
Developers 16
Overzealous Publishers Could Dampen IGA's Bright Future as an
Advertising Platform 16
Recession, a Boon for the IGA Industry 16
Crisis Fuels Demand for Branded Flash Games 17
Consumer is the King 17
Challenges Confronting In-Game Advertising 17
Lack of Platform Interoperability - Hampers Standardized
Performance Measurement 18
Need for Closer Regulation of Advertising in Games 18
Advergames More Prone to Hacking 18
Violent Games and Real Life Violence - Are they Linked? 19
Lack of Standardization in Metrics Make In-game Ad Campaigns a
Difficult Choice 19

4. ADVERTISING IN VIDEO AND COMPUTER GAMES 20
Top Video Game Advertising Trends 20
Industry Stakeholders 20
Few Vital Statistics 21
Table 6: Global Video Game Market (2010): Breakdown of Market
Size in US$ Billions by Geographic Region - EMEA,
Asia-Pacific, North America and Latin America (includes
corresponding Graph/Chart) 21

Table 7: Global Video Console Sales (2008-2010) in Millions
of Units (includes corresponding Graph/Chart) 21
Major Console Manufacturers and their Devices (Hand-Held and
Fixed) 21
Table 8: Global Market for Video and Computer Games (2011):
Percentage Share Breakdown by Market Segments - Home Console
Software, Online Game Revenues, Home Console Hardware, Mobile
Game, Handheld Software, Computer Software and Handheld
Hardware (includes corresponding Graph/Chart) 22

5. IGA - SERVICE OVERVIEW 23
In-Game Advertising 23
Table 9: Global In-game Advertising Audience as a Percentage
of TV Households for Years 2005-2010 (includes corresponding
Graph/Chart) 23
IGA - A Win-Win Proposal for Game Makers and Advertisers Alike 24
Various Options to Reach Target Audience in-Game Ads 24
In-game Advertising - Categories 25
Static In-game Advertising 25
Dynamic In-game Advertising 25
Pre game, Post game and Interstitial ads 25
Choice of a Game - The First Critical Choice 26
Appropriate Ad-Placement - A Vital Deal Point 26
Key Advantages Offered 26
Play it Right 26
Advergames 27
Chart Outlining Various Aspects of Video Game Advertising
Segments 28
Around Game Advertising 28
Game Types and Models 28
Various Game Types 28
Core and Casual Games 29
Casual, Hardcore and the Obsessive Type of Gamers 29
Table 10: Core and Casual Gamers Worldwide (2010):
Percentage Breakdown by Various Age-Groups - 18-34 Years,
35-44 Years, 45-54 Years and 55+ Years (includes
corresponding Graph/Chart) 30
Free-to-Play and Pay-to-Play Games 30
MMOGs 30
Gamer Engagement Measurement 30
Quantemo® Physiological Index for Measuring Gamer Engagement 30
Computer Games - Background 31
In-Game Advertising - A Brief History 32

6. SERVICE INTRODUCTIONS/ INNOVATIONS 33
Tap Me Introduces iPhone SDK, Ad Platform for iPhones 33
WildTangent Rolls Out Social Space Ad Platform BrandBoost™ in
the UK 33
WeeWorld Introduces SGA Network 33
SupersonicAds Launches BrandConnectTM, a Virtual Revenue
Monetization Solution 33
Tap Me Launches its First In-Game Advertising Platform 34
WildTangent Introduces BrandBoostTM In-game Advertising Platform 34
Electronic Arts Launches New In-Game Advertising Suite 35
Greystripe to Introduce iFlash Ads for iPads 35
Kingsoft to Introduce In-game Magazine Ads 35
Double Fusion to Introduce In-game Advertisements in WipEout®HD 35
Nissan Launches iPhone Game for Advertising Nissan Cube Car 36
Yahoo Unveils Games Site with Ad Supported Games 36
Greystripe to Introduce GS.Tailgate and GS.Impact
Advertisement Formats for iPhone 36
Google Launches Beta Version of AdSense 36

7. RECENT INDUSTRY ACTIVITY 37
ValueClick Takes Over Greystripe 37
Intergi and Ubisoft® Collaborate Over Ad Representation Services 37
NeoEdge Undergoes Name Change to ‘BlueNoodle' 37
Gameloft to Develop Advergame for Audi 38
Shanda Games Acquires Mochi Media 38
UBM Acquires Game Advertising Online 38
Electronic Arts and Gaikai Ink a Multi-Year Licensing Agreement 38
Candystand.com and Intergi Entertainment Collaborate over In-
game Advertising 38
Electronic Arts Moves In-Game Advertising Business In-house 39
Double Fusion Obtains Dynamic IGA Rights for Sports Series of
2K Sports 39
iWin Incorporates BrandBoostTM Platform of WildTangent into
Family Feud 39
Playdom to Integrate BrandBoostTM Platform of WildTangent into
Tiki Farm 40
IGA Worldwide Delivers In-Game Advertisements to Rising Eagle 40
WildTangent® Collaborates with CrowdStar® 40
Microsoft Shuts Down Massive Inc. 41
NAMCO BANDAI and Double Fusion Ink In-game Agreement 41
WildTangent Collaborates with Mochi Media Over Ad Sales 41
PlaceVine Partners with Double Fusion 42
OMGPOP Inks Exclusive Ad-Sale Agreement with WildTangent 42
Double Fusion Introduces In-Game Advertising Service in Japan 42
Sony Selects IGA Worldwide for MLB® 09, Baseball Game 42
IGA Worldwide Provides Ad Network Service to G4Box's Cross Fire 43
DG FastChannel Takes over Enliven 43
Yahoo Signs Agreements with NeoEdge and DoubleFusion 43
Massive Signs Multi-title and Multi-year Agreement with
Activision Publishing 44
Double Fusion Partners with Leading Videogame Publishers to
Strengthen Gaming Portfolio 44
Massive Signs Global Multi-year Deal with THQ 44
Google Forays Into In-Game Advertising 45
eType Video Bags Contract from Mochi Media 45
SCEE and SCEA Select Double Fusion for IGA Delivery on PS3™ 45
Mangrove Capital Partners Invests in EnterMedia 45
Double Fusion and NCsoft® Collaborate For City of Heroes®, an
Online Multiplayer Game 46
Doppelganger Selects Double Fusion to Integrate Brands into
its vSide Virtual World 46
Double Fusion to Support Dynamic Advertising in Gearbox's New
Games 46
Massive and EA Extend Existing Dynamic IGA Agreement 47
id Software Selects IGA Worldwide for Supporting IGA in Quake
Live 47
Double Fusion Supports Spill Group's Casual Games 47

8. FOCUS ON SELECT GLOBAL PLAYERS 49
Blockdot, Inc (US) 49
BlueNoodle / NeoEdge (US) 49
Double Fusion, Inc (US) 49
Electronic Arts Inc., (US) 50
Google Adscape Media (US) 50
Gaikai Inc (US) 51
Game Creative Pty Ltd (Australia) 51
Greystripe (US) 51
IGA Worldwide (US) 52
Intergi Entertainment (US) 52
Mochi Media (US) 52
Tap Me! Inc. (US) 52
WildTangent, Inc. (US) 53
Yahoo, Inc (US) 53

9. GLOBAL MARKET PERSPECTIVE 54
Table 11: World Recent Past, Current & Future Analysis for
In-game Advertising Market Independently Analyzed with Annual
Revenues in US$ Million for Years 2009 through 2017 (includes
corresponding Graph/Chart) 54

Table 12: World Historic Review for In-game Advertising Market
Independently Analyzed with Annual Revenues in US$ Million for
Years 2003 through 2008 (includes corresponding Graph/Chart) 55

10. THE UNITED STATES 56
A.Market Analysis 56
Outlook 56
An Overview of the US Video Game Industry 56
Figures Speak 56
Table 13: US Media Market: Breakdown of Expected CAGRs for
Media Formats -Internet & Video Game, Television, Radio and
(Years 2009-2017) (includes corresponding Graph/Chart) 56
Advertising in Video Games Becomes Mainstream Activity 57
Table 14: US Video Game Advertising Spends (2007-2010):
Percentage Share Breakdown by Categories - In-Game
Advertising and Advergames (includes corresponding
Graph/Chart) 57

Table 15: US Console Game Sales in Millions of Units for
the Year 2008 (includes corresponding Graph/Chart) 58
Service Introductions/ Launches 58
Recent Industry Activity 61
Key players 71
B.Market Analytics 76
Table 16: US Recent Past, Current & Future Analysis for
In-Game Advertising Market Independently Analyzed with
Annual Revenues in US$ Million for Years 2009 through 2017
(includes corresponding Graph/Chart) 76

Table 17: US Historic Review for In-Game Advertising Market
Independently Analyzed with Annual Revenues in US$ Million
for Years 2003 through 2008 (includes corresponding
Graph/Chart) 77

11. CANADA 78
A.Market Analysis 78
Outlook 78
B.Market Analytics 78
Table 18: Canadian Recent Past, Current & Future Analysis
for In-Game Advertising Market Independently Analyzed with
Annual Revenues in US$ Million for Years 2009 through 2017
(includes corresponding Graph/Chart) 78

Table 19: Canadian Historic Review for In-Game Advertising
Market Independently Analyzed with Annual Revenues in US$
Million for Years 2003 through 2008 (includes corresponding
Graph/Chart) 79

12. JAPAN 80
A.Market Analysis 80
Outlook 80
Service Introductions/ Launche 80
Recent Industry Activity 80
B.Market Analytics 81
Table 20: Japanese Recent Past, Current & Future Analysis
for In-Game Advertising Market Independently Analyzed with
Annual Revenues in US$ Million for Years 2009 through 2017
(includes corresponding Graph/Chart) 81

Table 21: Japanese Historic Review for In-Game Advertising
Market Independently Analyzed with Annual Revenues in US$
Million for Years 2003 through 2008 (includes corresponding
Graph/Chart) 82

13. EUROPE 83
A.Market Analysis 83
Outlook 83
IGA in Europe - A Nascent Yet Promising Advertising Segment 83
Table 22: European Console Sales (2010): Breakdown of Unit
Sales by the Big Five Countries- The United Kingdom,
France, Germany, Spain and Italy (Sales in Million)
(includes corresponding Graph/Chart) 83
Service Introductions/ Launche 84
Recent Industry Activity 84
B.Market Analytics 86
Table 23: European Recent Past, Current & Future Analysis
for In-game Advertising Market Independently Analyzed with
Annual Revenues in US$ Million for Years 2009 through 2017
(includes corresponding Graph/Chart) 86

Table 24: European Historic Review for In-game Advertising
Market Independently Analyzed with Annual Revenues in US$
Million for Years 2003 through 2008 (includes corresponding
Graph/Chart) 87

13a. France 88
A.Market Analysis 88
Outlook 88
B.Market Analytics 88
Table 25: French Recent Past, Current & Future Analysis for
In-game Advertising Market Independently Analyzed with
Annual Revenues in US$ Million for Years 2009 through 2017
(includes corresponding Graph/Chart) 88

Table 26: French Historic Review for In-game Advertising
Market Independently Analyzed with Annual Revenues in US$
Million for Years 2003 through 2008 (includes corresponding
Graph/Chart) 89

13b. GERMANY 90
A.Market Analysis 90
Outlook 90
B.Market Analytics 90
Table 27: German Recent Past, Current & Future Analysis for
In-game Advertising Market Independently Analyzed with
Annual Revenues in US$ Million for Years 2009 through 2017
(includes corresponding Graph/Chart) 90

Table 28: German Historic Review for In-game Advertising
Market Independently Analyzed with Annual Revenues in US$
Million for Years 2003 through 2008 (includes corresponding
Graph/Chart) 91

13c. ITALY 92
A.Market Analysis 92
Outlook 92
B.Market Analytics 92
Table 29: Italian Recent Past, Current & Future Analysis for
In-game Advertising Market Independently Analyzed with
Annual Revenues in US$ Million for Years 2009 through 2017
(includes corresponding Graph/Chart) 92

Table 30: Italian Historic Review for In-game Advertising
Market Independently Analyzed with Annual Revenues in US$
Million for Years 2003 through 2008 (includes corresponding
Graph/Chart) 93

13d. THE UNITED KINGDOM 94
A.Market Analysis 94
Outlook 94
Service Introduction 94
B.Market Analytics 95
Table 31: UK Recent Past, Current & Future Analysis for
In-game Advertising Market Independently Analyzed with
Annual Revenues in US$ Million for Years 2009 through 2017
(includes corresponding Graph/Chart) 95

Table 32: UK Historic Review for In-game Advertising Market
Independently Analyzed with Annual Revenues in US$ Million
for Years 2003 through 2008 (includes corresponding
Graph/Chart) 96

13e. SPAIN 97
A.Market Analysis 97
Outlook 97
B.Market Analytics 97
Table 33: Spanish Recent Past, Current & Future Analysis for
In-game Advertising Market Independently Analyzed with
Annual Revenues in US$ Million for Years 2009 through 2017
(includes corresponding Graph/Chart) 97

Table 34: Spanish Historic Review for In-game Advertising
Market Independently Analyzed with Annual Revenues in US$
Million for Years 2003 through 2008 (includes corresponding
Graph/Chart) 98

13f. RUSSIA 99
A.Market Analysis 99
Outlook 99
B.Market Analytics 99
Table 35: Russian Recent Past, Current & Future Analysis for
In-game Advertising Market Independently Analyzed with
Annual Revenues in US$ Million for Years 2009 through 2017
(includes corresponding Graph/Chart) 99

Table 36: Russian Historic Review for In-game Advertising
Market Independently Analyzed with Annual Revenues in US$
Million for Years 2003 through 2008 (includes corresponding
Graph/Chart) 100

13g. REST OF EUROPE 101
A.Market Analysis 101
Outlook 101
B.Market Analytics 101
Table 37: Rest of Europe Recent Past, Current & Future
Analysis for In-game Advertising Market Independently
Analyzed with Annual Revenues in US$ Million for Years 2009
through 2017 (includes corresponding Graph/Chart) 101

Table 38: Rest of Europe Historic Review for In-game
Advertising Market Independently Analyzed with Annual
Revenues in US$ Million for Years 2003 through 2008
(includes corresponding Graph/Chart) 102

14. ASIA-PACIFIC 103
A.Market Analysis 103
Outlook 103
The Australian IGA Market Displays Rapid Growth 103
The Chinese In-game Advertising Industry - An Overview 103
Entertainment and Media Industry in India to Witness a Boom 104
Service Introductions/ Launche 104
Key Player 105
B.Market Analytics 105
Table 39: Asia-Pacific Recent Past, Current & Future
Analysis for In-game Advertising Market Independently
Analyzed with Annual Revenues in US$ Million for Years 2009
through 2017 (includes corresponding Graph/Chart) 105

Table 40: Asia-Pacific Historic Review for In-game
Advertising Market Independently Analyzed with Annual
Revenues in US$ Million for Years 2003 through 2008
(includes corresponding Graph/Chart) 106

15. THE MIDDLE EAST 107
A.Market Analysis 107
Outlook 107
B.Market Analytics 107
Table 41: Middle East Recent Past, Current & Future Analysis
for In-game Advertising Market Independently Analyzed with
Annual Revenues in US$ Million for Years 2009 through 2017
(includes corresponding Graph/Chart) 107

Table 42: Middle East Historic Review for In-game
Advertising Market Independently Analyzed with Annual
Revenues in US$ Million for Years 2003 through 2008
(includes corresponding Graph/Chart) 108

16. LATIN AMERICA 109
A.Market Analysis 109
Outlook 109
B.Market Analytics 109
Table 43: Latin America Recent Past, Current & Future
Analysis for In-game Advertising Market Independently
Analyzed with Annual Revenues in US$ Million for Years 2009
through 2017 (includes corresponding Graph/Chart) 109

Table 44: Latin America Historic Review for In-game
Advertising Market Independently Analyzed with Annual
Revenues in US$ Million for Years 2003 through 2008
(includes corresponding Graph/Chart) 110

COMPETITIVE LANDSCAPE

Total Companies Profiled: 35 (including Divisions/Subsidiaries - 37)

Region/Country Players

The United States 25
Canada 2
Europe 5
The United Kingdom 2
Spain 1
Rest of Europe 2
Asia-Pacific (Excluding Japan) 5

Gaming is fast becoming a dominant form of entertainment across the globe, overtaking some of the best-known, traditional entertainment mediums including the television. In fact in recent years, TV viewership in the lucrative 18-34 male age group declined by about 12% while recording a simultaneous increase of 20% in the time spent towards video and other gaming. Another notable trend lately has been the rising popularity of advertising in social networking games. Owing to its rapidly increasing popularity, social networking is on the verge of becoming a powerful cult form of consumer connectivity, providing tremendous scope for market growth. Even a small branding span in social networking games assures advertisers enormous exposure to a gaming audience base of about 70 million across the globe. The fact that several games are free of cost, makes the channel even more attractive for the avid gamers as well as advertising firms for lucrative brand positioning. Although IDA currently forms a small proportion of overall advertising budgetary allocation, the percentage is slated to grow in tandem with exposure to industries other than the traditional sporting and food & beverage segments.

The gaming industry is recognizing in-game advertising as a new and significant revenue stream in addition to the conventional retail sales revenue model. In-game ads are also proven to increase purchase intent by a significant percentage, with atleast 50% higher brand recall as compared to other media such as print, online and TV. Games today are becoming shorter and more intense, commanding advertisers to display greater creativity and uniqueness in retaining sustained attention span of viewers. With fierce competition and price wars, companies are under pressure to innovate and release ads that create maximum impact in a limited period of time. Proper ad placement plays an extremely important role, as contextually irrelevant placement runs the risk of negatively affecting a brand image, defeating the sole purpose of advertising. Ad placements need to ensure seamless welding of the gamer’s physical and virtual worlds, without seeming to intrude or annoy the player in midst of a game.

A unique trend witnessed recently is that of game developers making their own ads / brand promotion campaigns in-house without use of external outsourcing. Although this has led to dwindling business for professional advertising agencies, the game developers are seeking to vertically integrate their service options and cut down costs. During the recent economic recession, more number of advertisers embraced branded flash games, as they offered a cost-effective means of making the most of their limited advertising budgets. Branded Internet based flash games, integrated into their websites, offer advertisers a number of advantages over traditional TV and print ad campaigns and more importantly, at a fraction of the cost. The flash in-game advertising also enables active viewer participation and interaction with the brand, unlike other passive, traditional forms of advertising.

North America and Europe represent the largest and most influential markets worldwide, as stated by Global Industry Analysts's new research report on In-Game Advertising. The US alone represents a formidable market with American male population in the age bracket of 18-35 years spending a whopping 35 million hours on gaming activity. Asia-Pacific is another significant market, buoyed by a continuous expansion of video gaming and higher spending power. In Asia-Pacific, in-game advertising is ranked as the fourth most popular entertainment source after television, Internet and Radio. The Asian market backed by promising markets of China, Australia and India is forecast to race ahead at an impressive CAGR of about 19%, through 2017.

Global Industry Analysts ©

- Blockdot, Inc.
- BlueNoodle / NeoEdge
- Double Fusion, Inc.
- Electronic Arts Inc.
- Google Adscape Media
- Gaikai Inc.
- Game Creative Pty Ltd.
- Greystripe
- IGA Worldwide
- Intergi Entertainment
- Mochi Media
- Tap M! Inc.
- WildTangent, Inc.
- Yahoo, Inc.

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