Game Advertising Expanding, Becoming Dynamic?

Thanks to Business Week Online for its feature discussing the rise of videogame advertising, as it charts "spending on in-game advertising, currently estimated at around $200 million a year today worldwide, [and which] could reach $1 billion by 2008." As well as kid-oriented gaming sites such as Neopets.com, where "a player might stop by a Disney theater where he can play a Walt Disney movie-related game to earn Neopoints - good for buying shop space and land in the game", the article mentions Massive Inc., an "in-game advertising specialist" which is now signing up advertisers for "campaign-based advertising" in forthcoming titles from Ubisoft and Atari, explaining the innovation by describing a possible scenario: "The gamer goes online to play a racing game, for example, and a batch of ads is served. When a gamer plays offline, Massive continues to serve ads. The ads are integrated into billboards, posters, and even into the plotline of the game, and they change in real-time."

Comments

Re:Cheaper?

[MarkPNeyer]

A game "should" be cheaper if there is a fluctuation in market supply or demand - the price of an object "should" have nothing to do with the cost of production, aside from being higher. If these new ads lead to a decrease in the demand for games, then in a true market situation the price of games would fall; unfortunately the economics of video game distribution have always been screwed up. Otherwise, if demand for the games is unchanged by the ads, and supply stays the same, then the price shouldn't change, even though the producer is getting more revenue from the ads.