Video Games Attract Advertisers as TV Loses Effectiveness

Yankee Group: The in-game advertising market is poised for explosive growth and will reach $732 million by 2010,. In a highly fragmented media environment, finds that interactive video games present a promising window of opportunity as a growing advertising medium and expects in-game advertising to have a significant impact on the business operations of video game publishers.

As television advertising loses its effectiveness, advertisers must reach a largely segmented audience with discerning tastes and are finding greater value and return on investments from in-game advertising.

In 2005, advertisers spent approximately $56 million placing ads in video games, up from $34 million in 2004. By year-end 2006, the number of games with in-game ads will more than double. Yankee Group anticipates approximately 200 games will contain in-game advertising, representing nearly all the major video game platforms.

As the market becomes more lucrative, it will have a significant impact on the business operations of video game publishers such as Activision, Ubisoft and Electronic Arts. Although console-based in-game ad serving is dominated by independent in-game ad-serving networks today, Yankee Group predicts that Microsoft, Sony and Electronic Arts will bring in-game ad serving in-house and come to dominate this segment of the market.

Although the in-game advertising market is still relatively untapped, its promising business model will lead to swift market development. Effectively competing in the interactive gaming market for the video game and advertising communities requires careful attention to the intricacies of the industry. / Publ 20060417

Key findings

With steady growth since 1998 the Asia Pacific became the strongest growing region globally, passing Europe as the market leader. Towards 2007 the region is expected to consolidate its position, aided by the expansion of the mobile phone market in China Japan and India .

Asia-Pacific's share of the global mobile phone market's value increased by 5.9 percentage points over the review period 2001-2005, growing from 36.1% in 2001 to 42% in 2005.

The Asia-Pacific mobile phone market generated total revenues of $24.8 billion in 2005, this representing a compound annual growth rate (CAGR) of 10.6% for the five-year period spanning 2001-2005.

Asia-Pacific mobile phone market is expected to decelerate from its current value growth position. With an anticipated CAGR of 8.9% over the 2005-2010 period, the market is expected to have reached a value of $38 billion by the end of 2010.

The 3G subscriber base has also increased from 10.5 million to 15.5 million in the year 2005. So this shows how the handsets users are moving towards the adoption of new technology and there is a increase in the mobile handsets with the latest model. Games? Wkipedia Red Viking yankeegroup

Publ 20060419