Creative & Tech

360i Report: Gaming

May 25, 2008

360i Point of View on
Video games are without a doubt now a major sector of the worldwide entertainment market. This year’s release of Grand Theft Auto IV was the biggest entertainment launch in history, taking in over $500 million in its first weekend and eclipsing Spider Man 3’s opening weekend box office earnings. It’s not just young men playing games, either; according to data released by eMarketer in April 2008, casual gamers are 72% female and 68% aged 49+. Although placement in or around video games can be expensive and labor-intensive, they provide an invaluable inroad to difficult-to-reach consumers who are watching less TV and tuning out standard banner ads.
What are We Talking about When We Say “Video Games?”

Video games have come a long way since the early days of Atari and Pong, and the term now encompasses a wide variety of entertainment software. Video games can be played on a home (or office) computer, a video game console (a set-top box that connects to a television and runs specially formatted DVDs), or mobile devices (such as cell phones, Blackberries, or mobile gaming devices.) They can be run from DVDs, downloadable, or playable with no install, such as Flash- or text-based games.

Games across all platforms are broadly divided into “casual games” and “hardcore games,” and although the distinction can sometimes be murky, casual games are characterized by simpler graphics and gameplay and shorter session times. They’re easy to learn and easy to pick up and play during a lunch break or subway ride. Hardcore games, by contrast, often have more realistic graphics and sound, more complex controls and gameplay, extensive storylines, and require many more consecutive hours of play to progress. Generally speaking, hardcore games skew younger and more male, and casual games skew older and more female.
Gaming Reach and Demographics

According to a March 2008 study by research firm Interpret, an estimated 145 million U.S. residents aged 12 to 65 played casual games in 2007–nearly two out of every three people in the country. A 2008 NPD group report estimated that 72% of the U.S. population plays some variety of video game. The demographics of casual and hardcore games differ dramatically. The data at right shows demographics for “white-collar” casual gamers published in an April 2008 eMarketer report, showing that white-collar casual gamers are predominantly female and over 40. This is a contrast to the data below, which covers more hardcore gamers, skewing more male and younger. We recommend marketers targeting older females look to the casual gaming sector, whereas marketers aiming at younger men should focus on hardcore titles.

What Opportunities are Available?

Video games offer a wide variety of opportunities for marketers, from trackable CPC ads to pure branding plays, similar to product placement in movies or TV. Most opportunities available to marketers interested in placing their products or content in or around video games can be broadly divided into four categories: in-game advertising, sponsorship, advergames, and downloadable content.

In-Game Advertising
In-game advertising can be compared to product placement in movies or television. In an in-game ad, a product or advertisement is placed inside the game environment as if the character were encountering it as the game progresses. The picture on the right shows a shot of an in-game ad placement for the Dell XPS product line in the title FEAR: Extraction Point. In-game ads come in two flavors,




Static in-game ads

are hard-coded into a game during the development process–they must be planned and paid for before the game is released, cannot be changed once the game is on the market, and once on the market, cannot be tracked or quantified, apart from panel brand-recall studies or raw sales figures. Dynamic in-game ads are inserted dynamically into the game’s environment, can be changed and tracked on the fly, and targeted geographically or by dayparting. Dynamic ads require that the PC or console running the game be connected to the Web for the duration of play. In-game ad placements are a branding vehicle, with little or no opportunity to drive players to a Web site. They are also very expensive–CPMs for in-game advertisements are comparable to buys on network television.
Sponsorship allows a brand to reach gamers by placing their ads surrounding a game experience, rather than within the game experience. Brands can sponsor specific games, or can create sponsored events like tournaments or free-play days.
Sponsored Games

On the right is an example of a sponsored game–The popular title “Zuma” is being sponsored by Nissan, and the ad is displayed while the game loads between levels. Clicking on the ad opens a new browser window. These ads are conceptually similar to a display ad campaign. They can be bought on a CPM or CPC basis, targeted geographically or demographically by selecting games that have the appropriate demographics (different games appeal to different audiences), and tracked using standard Web metrics.
Sponsored Events

Running a sponsored gaming event is comparable to sponsoring a major sporting event–the objective is to garner positive buzz surrounding the brand in the weeks leading up to the event, and to involve as many gamers as possible, allowing the brand to “be a hero” by sponsoring a fun and engaging activity.

To the right is a screenshot of the microsite for a major sponsored event: Pontiac’s Virtual NCAA Final 4, capitalizing on the popularity of 2K Sports’ College Hoops franchise as well as the excitement of March Madness. Such a sponsored event would involve partnering with not only the game developer, but also an online platform to support the tourney–In this case, Microsoft’s Xbox Live, which provides online game matchmaking for all Xbox titles. The performance of sponsored events can be tracked through any Web presence they have (like the above microsite), number of participants involved, and buzz analysis of online discussions of the event and the brand.
Advergames are games designed explicitly to promote a brand or product. On the right is a screenshot from the most successful advergame thus far made: America’s Army, developed by the Pentagon; although the Pentagon has been tight-lipped about the details, spokespeople have described it as the most effective recruiting tool in history. If well-made, advergames can be very effective ways to communicate brand or product attributes, or to engage players with branded imagery for long periods of time. When developed correctly, advergames can track the number and length of plays, viral spread (if the game is embeddable or otherwise sharable), unique players, and other relevant data. A well-made advergame can also add an engaging piece to an existing Web site, increasing page views and time spent.
Downloadable Content
With the recent phenomenon of online console gaming, Microsoft and Sony have launched a pair of online communities to offer matchmaking, friend lists, and other services to players on their respective consoles, the Xbox 360 and the Playstation 3. One of the features of both of these communities is online stores that allow users to purchase downloadable content (or DLC), and marketers can use this feature to promote their products or content.
Content Syndication

One way to leverage these online stores is by offering content for download. Many TV shows have full episodes available for download on the Xbox Live Marketplace and the Playstation Store, and other content like promos, music videos, or behind-the-scenes footage. Offering content for download on these services provides another avenue to reach viewers who prefer to get content on their own terms.
DLC Integration

Another way to leverage downloadable content is to make the brand or product part of the gaming experience. The simplest way to do this is to offer ways to customize a gamer’s interface or profile. On the right, is a free background from the movie Disturbia which has been applied to the user interface of an Xbox 360.

Another, more in-depth way to leverage DLC for marketing goals is to insert products or other branding into games already on the market. On the right is a screenshot from Project Gotham Racing 3, which released a downloadable content pack that allowed players to race in the new Cadillac V-Series cars. Offering DLC is another pure branding play — the success of downloadable content can be measured by how many players download the content.
360i’s Recommendation

Video games offer a wide variety of opportunities for advertisers to reach consumers who may not be as engaged or reachable through offline or online advertising. The spectrum of opportunities range from relatively low-cost, highly trackable options like sponsoring or branding a casual game, to very high cost, high-visibility options without much tracking built-in. Given that broad spectrum, there are options for a wide range of marketing goals and budgets available through gaming.

But not every brand or product is right for every sort of placement, and it’s critical to make sure that the strategy resonates well with the audience of the game it’s being targeted at. A well-conceived gaming strategy can strongly resonate with gamers. On the other hand, a poorly-thought out approach–Attempting to integrate modern brands in titles that have historical or futuristic settings, for example, or sponsoring placements that are too intrusive or distracting, can alienate the audience a marketer is hoping to reach. Gamers are an intensely vocal community online, and do not hesitate to air their grievances publically when they feel insulted, so it is vital that any marketer entering the space do so conscientiously and strategically.
Next Step
Contact your 360i strategic advisor to explore how you can best reach gamers through one of the many opportunities available in the space.