In-Game Advertising: $2 Billion by 2010? - eMarketer

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In-Game Advertising: $2 Billion by 2010?

Big numbers should often be swallowed along with several grains of salt.

April 19, 2006

Last year at the "Advertising in Games Forum" in New York City, Mitch Davis, CEO of Massive,predicted that the in-game advertising business would grow to $2.5 billion within five years, a 165-fold increase over the $15 million advertisers were estimated to have spent on the medium in 2004.

Speaking from the same podium a year later, and quoted in a recent article in Adweek, Mr. Davis predicted that US in-game ad spending would range between $1.6 billion and $1.8 billion in by 2010 and that it would account for roughly 3% of total media spending.

There is nothing innately wrong with Mr. Davis' predictions. He could be absolutely right on. It is his job to tout his medium and make it all that it can be. However, it should be noted that his numbers are on the high side compared to predictions from several researchers.

Jay Horowitz, an analyst with Jupiter Research estimated recently that in-game advertising sales in the US would be around $1 billion by 2010. As he told MediaPost, "There's a long way to go to making this a viable ongoing medium for advertisers."

Yankee Group thinks there is even further to go. Last month Yankee Group estimated that US in-game advertising revenue would reach $733 million in 2010, less than half Mr. Davis' estimate.

US In-Game Advertising* Revenues, 2004-2010 (millions)

Whose numbers are right? In-game advertising is a new medium, so no one knows for certain. Ultimately, if it affects your business, you have to decide. But there is one certainty: it will pay to get as many points of view as possible.

For a look at a wide range of views on the future of gaming, and to get eMarketer's perpsective on the subject, read Video Games: Where to Now?

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