Report: Web gives vid game ads cachet

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BRUSSELS -- The value of direct-to-Internet advertisements in video games is expected to grow more than tenfold by 2011, to $852 million from $80 million this year, according to a report published Wednesday.

As gamers connect consoles to the Internet, advertisers are expected to seize the opportunity by offering direct links to their Web sites, the report by ABI Research said.

It said that the phenomenon will make Internet advertising leap beyond the already impressive mark made by static ads in games.

"In many ways, console vendors and game publishers view gaming services as an ever more attractive channel to reach an active demographic," ABI research director Michael Wolf said. "In the past, static advertising meant that publishers and their ad partners could not create real-time marketing messages. With the incorporation of ad clients directly into game engines -- and through connections to ad servers -- advertisers will be able to deliver advertising that reaches audiences in-game and through the walled garden game network."

The report said that in-game advertising is just one of the new revenue streams that will emerge from the anticipated conversion of console gaming into connected gaming.

It said that online downloading of such entertainment content as movies and TV shows will grow as Sony and Microsoft nurture their video offerings. All three major console vendors will experience strong growth in casual game download revenue, the report said, as it forecast the casual and classic game download market for gaming consoles to grow to $1.1 billion by 2011 from $93 million in 2007.

"At present, all three game console vendors are investing heavily in online gaming and commerce infrastructure," Wolf said. "While these investments are not profitable today, we expect mounting acceptance of the online channel as one of the primary mediums to get new content on the console, causing online gaming to become a significant contributor to revenue for all three vendors within three to four years."

An ABI study released this year forecast that purchases of such in-game virtual assets as maps, game-related add-ons and casual game titles will account for more than $833 million by 2011.
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