The evolution of in-game advertising has been interesting to follow. The first strides were a number of years ago, as companies started to push the idea of ads inside of console games that were connected online, so ads could be rotated out. Of course, not all games were suitable for this (Coke billboards in Middle Earth? Hmm, might not be a good fit...), but sports games were a natural since billboards and logos already abound in arenas and stadiums. Still, this was a fairly limited intrusion in the overall picture.
Now we're entering a different era. Advertising in games is set to become more pervasive than not, for several reasons. First, the rise in free games that gain their revenue not from players but from advertisers. Of course, these games are mostly on mobile platforms, but we can expect to see this spread to computers (where they already have a foothold) and eventually to consoles. Such advertising need not be blended into the game setting; it can take the form of a banner, or an interstitial, or a full-blown commercial message inserted at various points. ("This fantasy adventure brought to you by...") Next, the free-to-play games have to have in-game advertising, because they make their money from players buying things inside the games. And how will the players know about those things unless there's some form of advertising?
Mobile and social games will be saturated with advertising, though there will doubtless be some room for content you pay extra for so it doesn't include ads. Somebody's got to pay for the games to be made, somehow. The halcyon days of games without advertising are over. The challenge is for marketers and game designers to figure out how to put advertising in without pissing of the customers.
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