Friday, March 23, 2007

Massively Multiplayer Games Challenge Marketers

Massively Multiplayer Games Challenge Marketers

source: eMarketer
MARCH 22, 2007

Reaching gamers in their extra lives takes skill.

There's some little video game the kids are playing now called World of Warcraft.

Except that it's not little, and it's often not kids playing. Globally, 8.5 million people play the game, and many pay $15/month for the privilege. South Park recently devoted a whole episode to parodying it.

The game's popularity drove revenues for the massively multiplayer online game (MMOG) sector to $576 million in 2006 for North America alone, according to Screen Digest. "During the past few years the Western landscape for MMOGs has become increasingly fragmented following the introduction of new genres of game including social networking, virtual pet rearing and virtual world building titles," said Piers Harding-Rolls of Screen Digest. "These new games and platforms have brought with them many new gamers and also new business models that are generating revenue that is largely incremental to the incumbent subscription business."

Subscription services account for 87% of the MMOG market in the West, but virtual item sales and in-game advertising are starting to contribute to the revenue mix.

In-game advertising is estimated to reach $589 million in 2010, up from $182 million in 2006, according to a January 2007 study by Oppenheimer & Co. that examined data from IDC, Yankee Group and Parks Associates.

This would all seem to be great news for marketers. The oft-sought-after 18-34-year-old male demographic is heavily into gaming. MMOGs offer the potential for viral communication, both in the games themselves and in dedicated message boards.

Despite the heady estimates, eMarketer senior analyst Paul Verna says that marketers need some perspective when considering how to associate their brands with MMOGs.

"In general, MMOGs do not lend themselves as readily to in-game display advertising or product placements as many console games do," said Mr. Verna. "On the other hand, the fact that MMOG players are, by definition, online makes them attractive to marketers looking to expose their brands to a connected audience.

"It's also worth noting that MMOGs make up about 50% of online gaming revenues on a worldwide basis," Mr. Verna continued. "With online gaming poised to grow at dramatic rates in the next five years, MMOGs should be closely considered for advertising opportunities provided that the brands in question not detract from the game experience."

Beside sweepstakes and other non-intrusive promotions, some actual in-game ads are possible, depending on the MMOG.

In URU Live, the MMOG based on the popular Myst franchise, players start out in the "real" world before being transported to the game's more fantastic settings. Players meet a guide in the "real" world who's got an open bag of Doritos in front of him.

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