Next leap coming for Nintendo, Sony
This year's holiday season will be an exclamation point on a watershed year for the video game industry, because both Nintendo and Sony will launch new advanced console platforms with many first-ever features, less than a year after Microsoft bowed its next generation similarly advanced system.
High-definition play, internet connections and a host of individual advanced features will push the hype and marketing around all three to significant levels.
The big race among the box makers is not only to secure video gamers' affection, but more and more to expand the market beyond the traditional or core players (See story below on video games).
Nintendo's about-to-be-launched Wii (pronounced "we"), formerly known as Revolution, in particular is expected to help that broader cause. Its infrared motion sensitive remote control that allows players to use the stick as an extension of their arm when playing games from tennis to fishing to Mario Bros. created tremendous buzz among fans at the industry premier show E3 in May.
"We're doing a sharp right turn, because the industry, while huge, has been around the same $10 billion level for sometime. We needed something innovative to broaden the market," says Perrin Kaplan, Nintendo VP-marketing and corporate affairs. One focus in the Wii marketing strategy that begins in early fall will be to supply hands-on game experiences to people from "core gamers to soccer moms to older people to people who have never played," she says. Even Wii's traditional print, TV and web ads will have interesting twists, she adds.
New ad opportunities
And as the market grows, so will opportunities for marketers who are interested in exploiting video games as a new advertising medium.
"Advertising in games is growing but still in its infancy in terms of truly understanding the market potential," says NPD Group analyst David Riley. "With the online capabilities of the (Sony) PS3, (Nintendo) Wii and (Microsoft) Xbox 360, as well as PC gaming, there's a vast new world for advertisers to explore alongside video game developers and publishers."
And while product placements and billboard ads have popped up in games for years, the idea of dynamically generated advertising-where creative and messaging can be changed by internet connectivity-is gathering momentum. In 2005, dynamic advertising accounted for more than $56 million in sales, but is expected to grow to more than $732 million by 2010, according to research by Yankee Group analyst Mike Goodman.
Leaders in the in-game dynamic advertising placement space include Massive (which was acquired by Microsoft in May); IGA Worldwide, and Double Fusion. Many of the famed software developers such as Electronic Arts and Midway also have their own departments to help marketers place ads in games. A few agencies, the most well-known being Publicis Groupe's Play division, also have units that specialize in video game advertising.
The two dominant portable video game makers, Sony with its PSP and Nintendo with its GameBoy and DS systems, will likely also get some kind of boost from video game ads, though because the systems are smaller physically, space and creativity become issues for marketers.
"Portable platforms like the Nintendo DS and PSP are certainly appropriate targets for advertisers. As with consoles, the ads must fit into the game, not the other way around. Smaller platforms like cellphones would work as well, though there's a lot more creativity needed, since the ads must take up more of the screen than they would on larger displays," Mr. Riley says.