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8/31/2006
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EA To Embed Ads In Video Games

Improved graphics and mass-market game appeal are also seen as contributing to the ascent of in-game ads, which EA claims will "enhance" the games. It's unclear how advertisers will gauge their ROI from the ads.

Electronics Arts Inc. said Thursday it has inked deals with video game advertising network Massive Inc. and IGA Worldwide to embed ads into its games. The pact highlights the move among video game publishers to explore new revenue streams to help cover the soaring development costs of graphics-intensive titles.

The agreement will enable Massive, a Microsoft Corp. subsidiary, and IGA, to include advertisements in EA's portfolio of games for consoles and PCs. Financial terms of the deal were not disclosed.

Building the ads into the game will require about two months notice, but isn't expected to increase development time, said Trudy Muller, EA spokeswoman. "The ads won't impact game play either, but rather enhance it," she said. Muller said the average video games takes between 12 and 18 months to create, with some graphic intensive games requiring more than two years.

EA will incorporate the ads into football stadiums, basketball courts and roadside in a racing game, for example. More than 50 percent of the games EA publishes are focused on sports.

Working with Massive, Need for Speed Carbon will become EA first game title to incorporate dynamic in-game ads, while IGA Worldwide will deliver ads for the combat simulation Battlefield 2142.

Industry experts are waiting to see how game enthusiasts will choose to interact with ads, and "what they will tolerate, and what turns them off," said IDC gaming analyst Billy Pidgeon.

"It will be interesting to see how advertisers monitor return on investment for branding their product inside the games," Pidgeon said. "Not too long ago, game publishers would pay royalty fees to companies like Nike to use their brand in the game in the 8- and 16-bit days."

That changed in the late 1990s with the last generation of games, Pidgeon said. Internet-connected consoles Sega's Dreamcast, Microsoft's Xbox, and Sony's PlayStation 2 accelerated the change. Improved graphics and mass market game appeal are also seen as contributing to the ascent of in-game ads.

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