In-Game Advertising on Consoles to Reach $850 Million by 2011

The ability to dynamically serve advertising into video games that are connected to the Internet will create a growing opportunity. As gamers connect consoles to the Internet for online gaming and commerce, publishers and their respective console partners increasingly will look to reach them through advertising — resulting in a market that will grow from $80 million in 2007 to $852 million by 2011.

”In many ways, console vendors and game publishers view gaming services as an ever-more attractive ‘channel’ to reach an active demographic,” says research director Michael Wolf. “In the past, static advertising meant that publishers and their ad partners could not create real-time marketing messages. With the incorporation of ad clients directly into game engines — and through connections to ad servers — advertisers will be able to deliver advertising that reaches audiences in-game and through the walled garden game network.”

ABI Research believes in-game advertising is just one of the new revenue streams that will come to fruition from the conversion of console gaming into connected gaming. Online downloading of entertainment content such as movies and TV shows will grow, as Sony and Microsoft nurture their respective video offerings. All three major console vendors will experience strong growth in casual game download revenues. ABI Research forecasts the casual and classic game download market for gaming consoles to grow tenfold from $93 million in 2007 to $1.1 billion by 2011.

“At present, all three game console vendors are investing heavily in online gaming and commerce infrastructure,” says Wolf. “While these investments are not profitable today, we expect mounting acceptance of the online channel as one of the primary mediums to get new content on the console, causing online gaming to become a significant contributor to revenues for all three vendors within 3 to 4 years.”

"Console and Handheld Online Gaming" examines conditions in the online gaming markets for consoles and handhelds, looking at the current strategies of the three major platform providers as well as the ecosystem for digital distribution. It forms part of the Home Networking Research Service, which also includes other Research Reports, Research Briefs, Market Data, Online Databases, ABI Insights, and Analyst Inquiry Support.