The rush to marry brands to video games is on. With the $10.5 billion gaming industry promising a level of engagement with 13-to-34-year-old males that few other media can claim, many marketers have shifted budget into the space, driving spending on in-game ads and tie-ins toward the billion-buck mark. But Burger King's latest deal may change the model for video-game marketing.
It will partner with Microsoft's Xbox to create three video games built around the restaurant chain's ubiquitous mascot. The King will battle his way through shoot'em-ups that will be a cross between "Halo" and "Destroy All Humans" and, the chain hopes, into the hearts of a key fast-food target that averages 20 hours a week playing video games.
This is a rare example of a console game being built from the ground up for a consumer marketer. The U.S. Army has financed several mainstream video games, including "America's Army" that began as a free download and has been formatted for various consoles as training and recruiting tools. But Burger King and Microsoft are taking ad-icon-based games to a new level.
"It's the sexiest category," said Mike Vorhaus, managing partner, Frank N. Magid & Associates. "This is a pretty unique situation."
What makes this deal even more interesting for both gaming companies and marketers who want to work with them, is that the brand partner will also become the distributor, and, by financing the production of the game, will dramatically reduce the cost to the consumer.
The games will retail through Burger King's restaurants during a five-week December promotion. They are designed to sell for $3.99 with the purchase of a value meal, a steal for gamers used to paying upward of $60 for a single title.
The deal was first reported on gamer Web site Kotaku.com, and details were confirmed independently by Advertising Age. Burger King declined to comment. Microsoft executives also declined to comment on the program.
In addition to the action game, the King and other unspecified Burger King characters will find themselves in a fighting game that's a little "Street Fighter" and a bit of "Mortal Kombat," and a racing game that borrows elements from "Need for Speed" and "Forza Motorsport."
Burger King expects to sell nearly 7 million games, according to its consumer research. It will also run a concurrent children's promotion with the musical-game series Dance Dance Revolution.
The U.S. video-game business continues to explode-it already eclipses the domestic box office-as does the interest from A-list marketers across automotive, wireless, movies, music and other big-spending categories. Game developers have formed in-house divisions specifically to deal with brand integrations, as Nielsen Entertainment projects that ad spending will jump from $75 million in 2005 to more than $800 million by the end of the decade.
But estimates vary widely, and one industry executive last week predicted that spending on in-game ads could reach $1.8 billion in the U.S. by 2010. Mitch Davis, CEO of in-game ad service Massive, said the business could account for about 3% of the total media spending domestically.
"Advertising in games is making an impression. Gamers see it and recall it," Mr. Davis said. "Its growth is a foregone conclusion."
Burger King was going to tell franchisees that it needs to purchase 900 units of the game per restaurant for the five-week promotion in order to make its profit of 20% to 25%.