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Microsoft Officially Acquires Massive
Confirming cloudy information from a week or two back, Microsoft has officially acquired Massive, Inc. From the article: "According to the official statement, Microsoft also has begun exploring how to apply Massive technology to incorporate dynamic advertising into other online environments, such as Windows Live and MSN, and to make it available on the adCenter advertising platform. 'We are committed to building an advertiser network that serves a wide spectrum of needs,' said Kevin Johnson, co-president of the Platforms & Services Division at Microsoft. 'Our acquisition of Massive will expand opportunities for advertisers and enable connection to a broader audience of digital consumers.'"
So, now not only do they have the platform that most developers use for games, but they're also going to be the source for most advertising within those games. Makes you wonder if they'll be using it to pull any strings, like "hey, if you used our closed source development tools, we'll give you a discount on our ads!"
The key question with adding ads to software or content is this: does the user get anything extra because of the ads?
If the user getting content for free because of an ad, then users will put up with it, as they have historically done on TV; they may skip the ads, but they don't necessarily complain about it too much because they perceive it as part of a deal.
If the ad makes the content more real (e.g. ads on the side of football pitches) don't think many people would object.
BUT - if the user IS paying for the content, and its price is not coming down because of the the ad, and it's not adding to the realism of the content - then you have a situation where users will start increasingly to rebel at being forced to watch ads, and cease buying products because of them.
You might say that corporate greed will win - but this is not necessarily in the ad's favour. As I recall, someone from EA (I think in an IV in Edge magazine) recently pointed out that their revenue from ads is under 2% of their total revenue. They are not going to risk failing to sell Halo X for $XXX because they want to squeeze in a couple of ads which will generate a tiny amount of extra revenue.
However, the ad industry desperately wants to beleive that in-game product placement has a huge future. That does not mean it's going to happen. But some ad guys have clearly caught Microsoft's ear. Time will tell if MS wins from this purchase. Personally, I doubt it.
As far back as the initial release of 95 it stuck a bunch of advert shortcuts on your desktop to "preferred online services"
That said, given they're apparently not allowed to bundle it could be used to put a bunch of possible 3rd party media players into an ad and say "These are pretty good". Then they could include Media Player and get away with it.