Why Aren’t We Seeing More Advertising in Video Games?

It has been established for some time now that audiences are spending more on video games than any other form of entertainment, so it’s more than a curious oddity as to why we are not seeing the same level of ubiquity in product placement in high profile games compared to what we see in the equivalent films and television. In a time where audiences are becoming more averse to traditional advertising, and more adept at avoiding it, why are many brands still seeing triple A games as a dangerous frontier rather than the gold mines they could so easily be?

Yes We Can

Video games have a surprisingly rich history when it comes to the use of in-game advertising (IGA). The first known use of IGA was in 1991 when a spot for Penguin Biscuits was featured in the platformer “James Pond - RoboCod” and today we find many sports and driving sims such as FIFA, Forza and Gran Turismo featuring plenty of static in-game advertising where established brand names are commonplace around the football pitch and tracksides.

Since games went online, however, we have also seen the emergence of dynamic in-game advertising where advertisers can buy pre-ordained space within a game’s world that can be altered for a suitable time and territory. The most famous, and maybe most effective too, was in 2008 when Obama’s campaign paid to be featured on billboards in the fast-paced arcade racer, Burnout Paradise, exclusively in the US to target younger voters during the run up to the election that year.

With previous success stories and acceptance in contextually appropriate games in a medium that encourages the repetition of content (and therefore a repetition in exposure to a featured brand), one would imagine advertisers and game developers to be working hand in hand to continue to push boundaries and become more successful at fusing brands into games to benefit both parties. The reality is proving rather different, though.

Pride & Prejudice

While the fiscal interests of both advertisers and game developers seem mutually beneficial, it’s also easy to see why both parties can be quite wary of one another.

The development of triple A games is not an agile or responsive process and this can be an issue for advertisers who want to be involved in a project early on as it can be difficult to plan ahead for a brand’s needs in a game that could easily take anything from 3 to 5 years until release -far longer than the usual production times for films and television. Likewise, game developers can find the need to incorporate a brand’s interests into a game to be restrictive on the game’s aesthetics and player interaction and can be an unwanted interference in a creative process where it can often be laborious to implement even the most minor of changes thanks to the complex coding needs of modern games.

There are also many misconceptions and preconceptions about video games that can leave brands unwilling to feature in video games. One of the more common of these is that gamers tend to be young males in the 18-34 demographic and below, perhaps due to the perceived newness of the medium and content that can appear to be aimed almost exclusively towards more adolescent tastes; however, actual market research proves that the largest percentage of gamers actually skew north of that age group and nearly just as many females as males make up the audience for games as shown in the graph below taken from an Electronic Software Association survey in 2013 demonstrates:

Games Graph1

Another reason why advertisers are wary of aligning a brand with the medium is because of how games are perceived by people who do not engage with video games. As this graph from the Pew Research Center shows, those who do not identify as a gamer or play games have a far less positive perception of the medium than those that do:

Games Graph 2

This lack of positivity in non-gamers could be down to a lack of education or experience with games but it is also likely fuelled by the mainstream media’s predilection for concentrating on the more violent and controversial content within games when dealing with the medium.

This can only give advertisers pause for thought when associating a brand with video games while game developers sometimes count on such controversy and outrage to drive sales such as Call of Duty and Grand Theft Auto, two of the most successful franchises in gaming. It would be highly unlikely to see compromise from series like these to bring in ad revenue when their explicit nature is obviously so capable of driving direct sales.

Are Gamers Paying the Price?

With the above dichotomy in mind, one must consider whether games even require in game advertising. If it is the creative freedom unhindered by brand compliancy that offers so much appeal to games, would it be to their detriment to start employing them more?

As discussed above, a series like Grand Theft Auto would almost certainly compromise itself by employing real world brands as the game’s developers, Rockstar, are famous for satirising established companies with thinly veiled pseudonyms (e.g. the in-game social media platform, Lifeinvader.com, in GTA V was clearly a joke at Facebook’s expense). But with record breaking sales -GTA V is second most successful entertainment release of all time with over 65 million copies sold- it’s a franchise that would merely see ad revenue as a bonus.

However, GTA is also franchise that has set new standards in the execution of video games with a vast open world and seemingly endless activities for players all presented in high graphical fidelity and these standards put pressure on other major releases to remain competitive, and that comes at a considerable cost in terms of production.

It has been widely reported over the last few years that high profile releases such as Tomb Raider, Alien: Isolation, and Bioshock: Infinite all fell short of projected sales targets and failed to make back their exorbitant production budgets. These short comings are making game publishers evermore keen to turn triple A games into sources of revenue beyond their initial sale with micro-transactions for in-game skins and items as well as game progression, a practise that has become referred to as “fee-to-play”.

Fee-to-play is extremely unpopular with the gaming audience: it is seen as crass, exploitive, and, in some cases, cheating. The practise is often poorly implemented and interrupts the user’s experience with persistent reminders appearing in-game in an attempt to draw further transactions from players who feel it is inappropriate after having paid the full retail price for the game already.

This is why it would maybe suit triple A games to bring in ad revenue from in-game advertising to help cover the increasing production costs and alleviate the need for them to “nickel and dime” gamers. Gamers would be far more likely to respond positively to a branded product being used in-game in a contextually correct manner than to be hassled for further transactions.

Obviously, not all games are able to lend themselves contextually to IGA’s. One wouldn’t expect to see a can of Coca Cola in the Lord of Rings films so the same applies to a fantasy games series like The Elder Scrolls or The Witcher. However, the latest Deus Ex game, Mankind Divided, has received much criticism for its use of fee-to-play elements but with its futuristic real world setting, it could have lent itself perfectly to product placement just as films of similar settings such as I, Robot and Minority Report famously have in the past.

With such clear benefits of mass and repeated exposure to advertisers and a more congruent way of generating subsidiary revenue for games than some of the current fee-to-play practises, it is somewhat mystifying and frustrating that in-game advertising is not more widely used in spite of some of the aforementioned issues. Perhaps necessity will eventually lead to more widespread use but for now, it seems advertisers aren’t capitalising enough on the world’s most successful entertainment industry while gamers are having to pick up the tab for the rising production costs of their favourite pastime.

David Murphy

David Murphy

EntSight Researcher