Kids Upfront '09

Where the Video Games Are: In the Living Room

Why Electronic Arts and Activision Now Target the Whole Family

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YORK, Pa. (AdAge.com) -- Years ago, a video game's success was almost certainly sealed by a great gamer-magazine review and an enthusiastic audience of basement-dwelling 16-year-old boys. Ad buys? A smattering of print in the top video-game reads and, if it felt like a real blockbuster, maybe a screen-shot-laden cable TV commercial.

Nintendo has boosted its ad spending in the past 3 years.
Nintendo has boosted its ad spending in the past 3 years.
But these days, the newest games are discovered by kids as young as 4 or 5 eating sugary cereal and watching Saturday-morning TV -- or by moms who point them out as they flip through the latest issue of Entertainment Weekly or Ladies' Home Journal.

Even as most kid marketers' budgets shrink -- by regulation, in the case of food companies, or by the economy, in the case of everyone else -- video-game marketing spending is growing. The previously steady, now hurried march of gaming into mainstream America, with a flood of family-friendly titles, has hardware makers and game developers trying to extend their advertising reach as well.

Nintendo leads the way
Nintendo, maker of the ultimate family gaming machine, Wii, and a plethora of "E for everyone" titles, has led the way, boosting its ad spending from less than $13 million in 2006, the first year of Wii, to $57 million in 2007 and $41 million through November of last year across all Wii hardware and games, according to TNS Media Intelligence.

KIDS' UPFRONT '09
Check out Ad Age's full coverage to see where advertisers are playing this year.

And it seems to have worked. The top four games for 2008, according to NPD Group, were Nintendo Wii titles "Wii Play" and "Mario Kart" ($5 million in ad spending, according to TNS); Wii Fit ($12 million); and "Super Smash Bros. Brawl" ($1.5 million).

"Originally everyone was so fixated on the 18- to 34-year-old male," said Michael Cai, Interpret's VP-research, video games. "Then with the Wii, and online casual-gaming sites exploding ... now publishers are designing and developing many more family-friendly games to appeal to people from 7 to 70 years old. With that expanded market, it makes sense for them to look at additional marketing and sales channels."

Top video-game publisher Electronic Arts, for instance, made a point of telling analysts during its quarterly investment conference call in February (in which it reported a net loss of $641 million) that it will shift 50% of its emphasis and budget to games for the Wii platform, including a Wii-focused ad campaign.

CEO John Riccitiello pointed to a renewed marketing push across all titles as key to EA's plans this year. "We plan to match strong quality with strong marketing -- particularly with our top 10 titles. Operationally we expect to improve the way we go to market with our titles -- starting earlier to create positive buzz and demand. Every expense will be down significantly this year, he said, "with the exception of variable advertising."

Game makers boost spending
That will likely help continue the trend at both EA and its rival, Activision Blizzard, of increasing ad spending to reach kids. In kid TV programming, EA spent $6.3 million on Nickelodeon last year, up from $1.1 million in 2007, while Activision spent $4.4 million, up from $3.2 million in 2007. EA also spent $1.5 million on Cartoon Network, up from $394,000 in 2007, while Activision also spent $1.5 million last year, up from $703,000 in 2007. In media overall, Activision spent heavily on the demographically broad "Guitar Hero" franchise, with more than $21.5 million in paid media through November 2008, according to TNS, a 75% increase over $5.3 million for all of 2007.

"As more people that grew up playing video games start to become parents themselves, they have a much better realization of the value proposition that games can provide," said analyst David Cole of DFC Intelligence. "There will be a lot more experimentation with marketing going forward, and the companies that are innovative with finding cost-effective ways to advertise to consumers could be much more successful than the rest of the pack. Marketing, advertising and distribution could become more important than ever."

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