I have watched my son and others play video games and I can tell you that the hours spent on these games often blows away TV because there is no channel surfing. My son pops Madden NFL 2007 from Electronic Arts into his GameCube and then three hours later he emerges from the basement bleary eyed. We have played some of the racing games together, like Need for Speed Most Wanted and I can already see the billboards for "Best Buy" along the road while I drive by.
Once advertisers see proof of how sticky and targeted these games are, I think more and more will move to this medium. And of course these games have the added benefit of being interactive and often online, so there is the added possibility of direct response advertising. This comes into play much more when you consider all of the handheld and cellphone gaming going on. Add in GPS and I can see someone playing Madden on his handheld and as he approaches a nearby Dicks Sporting Goods, his preferences and the GPS figure out that he is a Steeler's fan. He then sees an advertisement for Steeler's football jersies on sale at Dicks. In short, advertisers should be able to wring more ROI from these games than traditional tv spots. I have heard Eric Schmidt, Google CEO speak of this possibility and I am certain Google is planning this capability with cellphones and handhelds. Google doesnt seem to have cracked the video gaming market. It will be interesting to see if they move in this direction.
Of course the challenge for video gaming companies is to cleverly integrate ads so as not to junk up or slow down the game playing experience. The last thing they want to do is piss-off their core audience.
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