In-game advertising - sizing the market opportunity
In-Game Advertising Market Size Estimates ($ Millions) |
|||||||
2004 | 2005 | 2006 | 2007 | 2009 | 2010 | Notes | |
Microsoft | 1,000 | ||||||
Yankee Group | 34 | 56 | 732 | ||||
Park Associates | 80 | 400 | PC in-game | ||||
Massive, Inc CEO | 1,600 | $1.6-$1.8B | |||||
Analysts | 200 | 400 | 500 | 1,000 | |||
Metrics 2.0 |
- Microsoft's internal estimates put in-game advertising at about $1 billion per year by 2010.
- The Yankee group recently pegged in-game ad revenues at $732 million by 2010. In 2005, advertisers spent approximately $56 million placing ads in video games, up from $34 million in 2004.
- According to Parks Associates, PC in-game advertising will increase from $80 million in 2005 to more than $400 million in 2009.
- Microsoft estimates that 2005 brought in $56 million in in-game ad revenue.
- Mitch Davis, the CEO of Massive Inc., predicted that by 2010 between $1.6 billion and $1.8 billion will be spent putting real-world ads into the virtual world of games in the U.S.
- While game advertising is only a $200 million business in 2006, most experts estimate that number will rise dramatically over the next few years. By 2007, in-game ads are expected to be worth nearly $400 million, more than $500 million by 2009 and close to $1 billion by 2010.
According to a report from DFC Intelligence, the worldwide online game market is forecasted to grow from $3.4 billion in 2005 to over $13 billion in 2011. Another report from DFC Intelligence estimates the worldwide video game and interactive entertainment industry to grow from about $29 billion in 2005 to as much as $44 billion in 2011.
By comparison, U.S. advertising spending is expected to increase 4.9% in 2006 to $150.3 billion, according to the full-year forecast released TNS Media Intelligence. The global entertainment and media (E&M) industry will increase at a 6.6% compound annual growth rate (CAGR) to $1.8 trillion in 2010, according to PricewaterhouseCoopers' "Global Entertainment and Media Outlook: 2006–2010" report.
In 2005, U.S. Internet gamer households received about $0.10 worth of advertisement-supported gaming content on a monthly basis, compared to $50 worth of TV content, according to Parks Associates,
Parks Associate's survey also revealed very interesting demographic perceptions of in-game advertising:
- Males 18 – 34 are more open to seeing advertising than other age groups-29% say they would not mind seeing ads in games as long as it helps enhance game play, compared to only 19% 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% among 18-34 male and 35% among 35-54 female)
Men and women also differ about what is the least intrusive approach to in-game advertising:
- Men 18-34 prefer: product placement (49%); pre-game ads (22%); in-game bulletin boards (18%).
- Women 35-54 prefer: pre-game ads (42%) ; product placement (36%); between-level ad placement (13%).
In addition, gamers revealed through the survey that they expect a discount on game prices in exchange for seeing ads and the expected discount ranged from 31% for gamers ages 13-17 to 58% for women 55 and older.