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PC In-Game Advertising Revenue to Top $400 Million by 2009

PC in-game advertising will increase from $80 million in 2005 to more than $400 million in 2009, according to interactive entertainment market research firm Parks Associates (via Tekrati and MarketingVox). In April, Massive predicted that in-game advertising of any sort (not restricted to PC games) would near $2 billion by 2010.

Although videogames have become a mainstream entertainment pursuit in homes, in 2005 U.S. internet gamer households received about $0.10 worth of advertisement-supported gaming content per month, compared with $50 worth of TV content, Parks says.

Most in-game ads are aimed at so-called core gamers, males 18-34, but “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,” says Yuanzhe (Michael) Cai, Parks director of broadband and gaming.

According to Parks research, demographic groups vary widely in their perception of in-game advertising: Males 18-34 are more open to seeing advertising than other age groups, with 29 percent saying they would not mind seeing ads in games as long as it helps enhance game play, compared with 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; 35 percent among 35-54 female).

Men and women also differ about 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).

Gamers also expect a discount on game prices in exchange for seeing ads; the expected discount ranged from 31 percent for gamers 13-17 to 58 percent for women 55 and older.