Amount of time spent daily with each form of entertainment as compared to the amount of advertising money spent in US$. Makes games look like a great value for money and also an excellent opportunity to place advertising where it is currently lacking. Keep in mind that aside from gaming, all of these activities can be combined, so none has the viewers full attention. Most people surf the internet while tv commercials are on, or they read the paper while listening to the radio, etc. Gaming, as an immersive activity, requires the players full concentration, so there are no other distractions to take away from the experience or the messages.
Active gamers defined as someone who has purchased for their own use or been given a video game in the past 12 months 66.7 million equates to 23.2% of the total population Germany accounts for 26% of active European gamers All Active Gamers (000s ) UK: 15,753 France: 15,153 Germany: 17,129 Italy: 9,376 Spain: 9,290 Total: 66,701
Xbox 360 is the only one of the three consoles to allow in-game advertising to be delivered on its hardware. All advertising must be served through its subsidiary Massive, Inc. Sony has yet to announce which company they will work with when they allow for in-game advertising to run on its platform, and Nintendo shies away from advertising on its console altogether. Xbox 360 has been selling extremely well, mainly because it has the most available titles, making it even more obvious as a potential partner for in-game advertising.
Most console-based games are also released for PC, requiring powerful processors and video chips. PC games do not run simultaneously to the internet (meaning you cannot play an immersive PC game and also surf the web), so this is still a completely immersive form of entertainment.
PopCap’s games have been downloaded more than 150 million times,and its flagship title Bejeweled has sold more than 5 million units across all major platforms. PopCap games are available for Web, PC and Mac, Xbox, Xbox 360, cell-phones, PDAs, and other mobile devices. PopCap also runs a developer program to provide an opportunity for independent game developers to create and spread their games. Oberon Media is the largest creator of casual games and has recently signed a deal with MySpace to create their gaming platform. MiniClip is the largest casual games website in Europe and is continuing to expand its presence in North America. 40 million unique users per month. 25 million users for their toolbar and 35 million users receive the Miniclip newsletter with updates on new games.
This is an area to watch, particularly as mobile phone capabilities expand and improve. Increases in mobile usage mean more potential time spent with mobile games. These games must accomodate the structure and regulations of mobile technology. Small screens, short play periods, lower quality (but improving) graphics, etc.
Agenda1. Why Advertise in Video Games?2. Overview of the Video Game Industry3. Advertising Opportunities in Video Games4. Next Steps for Havas 8
Why Advertise in Video Games? Immersed audiences Wide reach: men, women, teens, adults Find new customers Reach existing customers in new and imaginative ways Opportunities for co-branding Various formats allow reach in different demographics, with different cost structures 9
The new face of the gamer More this…Less this… The Nintendo Wii has consistently been at the top of the Amazon.com wedding registry in 2007 10
An Uncluttered Opportunity 70,00 3:50 66 3:20 3:21 60,00 2:39 2:52 50,00 44.8 2:24 2003 40,00 Average Advertising Media Time 1:55 Revenue Spent/Day(In Millions) 30,00 (HH:MM) 1:26 1:09 19.1 1:03 20,00 0:57 10,00 8.5 0:28 0:38 0,03 0,00 0:00 TV Newspaper Radio Internet GamesSource: Arbitron, Television Bureau of Advertising, Entertainment Software Association and Yankee Group, 2005 11
Agenda1. Why Advertise in Video Games?2. Overview of the Video Game Industry3. Advertising Opportunities in Video Games4. Next Steps for Havas 12
Video Games in Entertainment • Video games are now a mainstream entertainmentVideoGames medium • 40% of US households have a video game console system • 120 million people play video or computer games in the US vs • 2006 US video game sales reached $12.6 Billion, up 19% from 2005 FILM • US Box office was only $9.5 Billion in 2006 vs • Video game revenues grew 28.4% from 2006-2007MUSIC • Music revenues dropped an estimated 10% over the same period • From 2004 to 2006, number of U.S. households with vs televisions that also have video game consoles rose from 38.6 TV million to 45.7 million. (18.5% increase) • Total number of U.S. households with televisions rose only 1.6 percent over the same timespan.Source: NPD, ESA, RIAA, MPAA, Nielsen 13
Who is Playing? – US Gamers • 69% of American heads of households play computer or video games • The average game player is 33 years old • In 2005, 25% of gamers were over the age of 50 • Women age 18 or older represent 30% of the game-playing population, versus 23% boys age 17 or youngerSource: Entertainment Software Association, 2006 14
Who is Playing? – European Gamers • 66.7 million active gamers (23.2% of the total population) • Germany the largest core European market* in absolute terms • 28% of males and 19% of females (over 5 years old) are active gamers • Female gamers are up 25% year-on-yearSource: GameVision, European Consumer intelligence Report, Spring 07Sample 11,894 across UK, France, Germany, Italy , Spain; weighted to 2007 population census data)* European countries included are: UK, France, Germany, Italy , Spain 15
Two Broad Categories Casual Games Core Games • Easy to learn, with simple gameplay, • Highly immersive,with deep andDescription graphics and rules extended gameplay and high quality • Fun to play, often addictive graphics and sound • 5 – 20 minutes per session • Gameplay sessions typically last 90Gameplay Length • Can be played in a series of short minutes bursts, during work breaks or on •Gamers are typically completely public transportation immersed in the world of the game • Online or downloadable web-based • Games are purchased either onlineMethod of Play Flash games or at retail • May be passed along to other users • Require powerful, high quality and spread virally computer or dedicated consoleMain Demographic • Targeted at mass audience • 60% are women, most age 35+ • 80% are male, age 18-34 • Typically free to play, though pay-to- • $30 - $70 per game at retailCost to Consumer play models do exist • Solitaire, Sudoku, Mahjong, Tetris, • Electronic Arts, Nintendo, Microsoft,Examples Extreme Pamplona, Gilette Jetski Activision Blizzard, Ubisoft, Take Two Source: Interactive Advertising Bureau: Game Advertising Platform Status Report, Oct 2007 16
A MultiPlatform Marketplace Console and Handheld Games PC Core Games PC Casual Games PC Virtual worlds Mobile Games 17
A MultiPlatform Marketplace 1 - Console and Handheld Games Console and Handheld Games Game consoles linked to TV sets through Platform audio/video cables, increasingly internet-ready,Description and dedicated handheld consoles 68% M / 32% F Consumer Median Age – 26 Profiles 38% of most frequent console gamers are under 18 70% of software shipments are for TV Based Key Gaming Consoles, 10% for handheld devices Market XBox360 and Wii lead next generation console Stats sales, but Sony´s PS2 continues to have strong sales Major Sony: PlayStation PS2 / PS3 / PSP Players Microsoft: Xbox / Xbox 360 Nintendo: GameCube / Wii / DS / GBA Action 30.1 % Top Title Sports 17.8 %Categories Shooters 9.6 % Children/Family 9.5 % Racing 9.4 % Increased presence as center of digital Trends to home/entertainment hub Watch Increased online connectivity Xbox Live now close to 8 Million Source: Entertainment Software Association, NPD 18
A MultiPlatform Marketplace1 - Console and Handheld Games Console Producers Fixed Consoles Handheld Devices Wii Gamecube DS Gameboy Advance Playstation 3 Playstation 2 PSP – PlayStation Portable XBox 360 XBox 19
A MultiPlatform Marketplace 1 - Console and Handheld Games CONSOLE HARDWARE SALES - 2006 Unit Dollar Unit Share Dollar Share Platform Volume (%) Volume (%)GameCube 756.656 6,5 $72.910.750 2,5PlayStation 2 4.713.323 40,8 $628.404.300 21,3PlayStation 3 687.256 5,9 $396.174.100 13,4Wii 1.080.310 9,3 $268.850.500 9,1 GameCube PS2 PS3 WiiXbox 391.876 3,4 $67.778.070 2,3 Xbox Xbox 360 OtherXbox 360 3.927.195 34 $1.512.159.000 51,3All Other 8.700 0,1 $526.823 0Source: NPD, 2006 20
A MultiPlatform Marketplace 1 - Console and Handheld Games CONSOLE SOFTWARE SALES - 2006 Unit Dollar Unit Share Dollar Share Platform Volume (%) Volume (%)GameCube 17.198.750 12,4 $481.843.900 10,1PlayStation 2 73.477.660 53,1 $2.303.179.000 48,4PlayStation 3 1.275.378 0,9 $75.171.730 1,6Wii 2.994.592 2,2 $145.262.500 3,1 GameCube PS2 PS3 WiiXbox 22.242.080 16,1 $603.749.800 12,7 Xbox Xbox360 OtherXbox 360 20.822.900 15 $1.148.104.000 24,1All Other 411.703 0,3 $4.783.447 0,1Source: NPD, 2006 21
Bestselling Video Game Titles of 2007 (US)1 2 3 4 5HALO 3 SUPER MARIO GALAXY WII PLAY(WITH REMOTE) CALL OF DUTY 4 GUITAR HERO IIIPlatform: Xbox 360 Platform: Nintendo Wii Platform: Nintendo Wii Platform: Xbox 360 Platform: PlayStation 2Genre: Action Genre: Action Genre: Casual / Arcade Genre: Action Genre: MusicPublisher: Microsoft Publisher: Nintendo Publisher: Nintendo Publisher: Activision Publisher: ActivisionDeveloper: Bungie Developer: Nintendo Developer: Nintendo Developer: Infinity Ward Developer: HarmonixRated “M” for Mature Rated "E" for Everyone Rated "E" for Everyone Rated “M” for Mature Rated “T” for TeenReleased: September 2007 Released: November 2007 Released: February 2007 Released: November 2007 Released: October 2007Copies sold: 4.82 million Copies sold: 2.52 million Copies sold: 4.12 million Copies sold: 3 million Copies sold: 2.7 million6 7 8 9 10POKEMON DIAMOND MADDEN NFL 08 GUITAR HERO II ASSASSIN´S CREED MARIO PARTY 8Platform: Nintendo DS Platform: PlayStation 2 Platform: PlayStation 2 Platform: Xbox 360 Platform: Nintendo WiiGenre: Adventure Genre: Sports Genre: Music Genre: Action Genre: ArcadePublisher: Nintendo Publisher: Electronic Arts Publisher: Activision Publisher: Ubisoft Publisher: NintendoDeveloper: Nintendo Developer: EA Sports Developer: Harmonix Developer: Ubisoft Developer: NintendoRated “E” for Everyone Rated “E” for Everyone Rated “T" for Teen Rated “M” For Mature Rated "E" forEveryoneReleased: April 2007 Released: August 2007 Released: November 2006 Released: November 2007 Released: May 2007Copies sold: 2.48 million Copies sold: 1.9 million Copies sold: 1.89 million Copies sold: 1.87 million Copies sold: 1.82 million Source: NPD 22
A MultiPlatform Marketplace 2 – PC Core Games PC Core Games Played on a computer through a CD-Rom or web Platform download. Allows for internet networked play and /Description or upgrades. 66% M / 34% F Consumer Median Age – 32 Profiles 96% of PC gamers buyers are 18+ 73.4% of U.S. households now own a personal Key computer Market 2007 PC game sales accounted for nearly 10% of Stats total game software sales Hardware developers: Alienware, Dell Major Software developers: NVidia, Electronic Arts, Players Blizzard Entertainment Multimedia companies: Disney, Time Warner now creating virtual worlds Strategy 26.9 % Top Title Children/Family 20.3 %Categories Shooters 16.3 % Role-Playing 10.0 % Adventure 5.9 % Trends to Rise of massive multi-player online role playing Watch games (MMORPG) A shift in top title categories as PCs become better equipped to process action / sports games Source: Entertainment Software Association, NPD, Nielsen 23
A MultiPlatform Marketplace 3 – PC Casual Games PC Casual Games Platform Played through online web portals that generallyDescription require user registration Consumer 56% M / 44% F Profiles Median Age – 36 44% of casual gamers download games from web Key 43% of most frequent gamers play online games Market 44% of casual gamers download games from game Stats oriented websites MSN Games Miniclip Major Yahoo! Games PopCap Players AOL Oberon Real Arcade Puzzle/Board/Trivia/Card 57 % Action/Sport/Strategy 19 % Top Title Shockwave/Flash 9%Categories Persistent Multi-player 9% Other 6% Emerging payment plans: ad-supported, Trends to micropayments, subscriptions Greater integration of marketing communication Watch channels New distribution methods: ie – Burger King stores distributed BK Xbox 360 games Source: Entertainment Software Association, NPD 24
A MultiPlatform Marketplace 4 – PC Virtual worlds PC Virtual Worlds Platform Persistent, alternate universes that exist online andDescription are available to users 24 hours a day, 7 days a week Some cater to kids, others to teens, and still Consumer Profiles others to adults age 18-34 Worlds can revolve around realistic alter-life, medieval times, or animal avatars, depending on demographic Key 80 % of active internet users will have a virtual Market world existence by the end of 2011 Stats Currently 173.61M registered virtual world users Major Disney (Club Penguin, Webkinz) Players Linden Labs (Second Life) Blizzard Entertainment (World of Warcraft) NCSoft (Guild Wars, Lineage) Top Title Kid WorldsCategories Alternative Universes Massive Multiplayer Online Games (MMOGs) Greater customization of virtual worlds to reach Trends to target demographics (ie – kids, teens) Watch Cobranding opportunities: virtual worlds paired with movies, tv shows, and music Source: Entertainment Software Association, NPD, Gartner Research 25
A MultiPlatform Marketplace 4 – PC Virtual worlds Top Massive Multiplayer Online Games and Virtual Worlds Name Release Date Active Users Target Group GenreCyworld 1999 20M Teens 14-24 Virtual World / TeensWorld of Warcraft 2004 8.5M Adults 15-34 Fantasy / RPGHabbo Hotel 2000 7.5M Kids 13-18 Virtual World / KidsRuneScape 2001 5M Teens 14-24 Fantasy / RPGClub Penguin 2006 4M Kids 8-14 Virtual World / KidsWebkinz 2005 3.8M Kids 6-12 Virtual World / KidsGaia Online 2003 2M Teens Virtual World / TeenGuild Wars 2005 2M Adults 18-34 Fantasy / RPGPuzzle Pirates 2003 1.5M Adults 18-34 PuzzleLineage I/II 1998 1M Adults 18-34 Fantasy / RPGSecond Life 2003 0.5M Adults 18-45 Virtual WorldSource: GigaOm, Gamasutra, TechCrunch 26
A MultiPlatform Marketplace 4 – PC Virtual worlds Origin • US • S. Korea • Finland • US# Active Users • 0.5 Million • 20 Million • 8 Million • 4 Million Target • Mainly adults • 90% of Koreans in • Boys & girls, age • Boys & girls, ageDemographics their 20s 13-18 8-14Miscellaneous • Linden Dollar • Now exists in • Localized in 31 • Acquired by currency trades North America and countries Disney for $700 against the US Pacific Rim. Coming Million Dollar soon to EU • Kids use penguin • Operated by avatars to chat, play Linden Labs, but mini games, and everything within is build virtual created by the users communities 27
A MultiPlatform Marketplace 5 – Mobile Games Mobile Games Platform Multi-media devices are used to playDescription games (mobile phone, PDA) Consumer Mobile Phones: PDAs Profiles 36% M / 64% F 56% M / 44% F Median Age – 27 Median Age – 36 Key 34% of heads of households play games on these Market devices Stats 64 M cell phone game downloads in ‘05 Cell phone downloads generated $158 Million in revenue in ‘05 Major Nokia: N-Gage Players Palm: Handhelds & Operating Systems Puzzles 45% Top Title Arcade Classics 36%Categories Board/Game Show/ Trivia 19% Convergence of functions (audio/video/gaming/cell phone) Cell phone quickly emerging as a key platform in Trends to the gaming industry Watch Mobile phone as preferred method of playing casual games Source: Entertainment Software Association, NPD 28
A MultiPlatform Marketplace 5 – Mobile Games Online and Mobile Games: Not Just Gameboy Anymore 32% 70% of heads of households play of US males are gamers games on mobile devices Who Plays Online Games? such as cell phone or PDA, up from 20% in 2002 68% of casual gamers are female, with an average age of 36 58% 42% Of online Of online gamers are gamers are male femaleSource: Nielsen, NPD Group, Interactive Advertising Bureau 29
Agenda1. Why Advertising in Video Games?2. Overview of the Video Game Industry3. Advertising Opportunities in Video Games4. Next Steps for Havas 30
Overview of Advertising Opportunities lead time lead timeLOW cost HIGH cost Product Around In-Game In-Game Adver- Place- Game Dynamic Static games ment • Web site, banners • PC / Console • Console • Console • Casual • Internet • Connected PCs & • Consoles & PCs • Consoles & PCs • Web-based Consoles • €5cpm • €? – depends on • €? – depends on • €10,000 - €1M+ • €20 - €35cpm game title and level game title and level of brand integration of brand integration 31
Around-Game Advertising MiniClip: A Casual Gaming Destination New games are featured on Displaylanding page and advertising onare rotated over a homepage period of weeks Top 10 games MiniClip will host list creates pre-developed additional games but also buzz have a dedicated team of developers who can create Other advertising games to a client´s options include: specifications • Homepage takeover • Gamepage takeover • Dedicated games• 30M unique visitors • Advertising onper month newsletter• 2.5M users have • Pre-game videodownloaded thetoolbar• 3.5 M users receivethe newsletter* * Source: MiniClip 32
In-Game Dynamic Description In-Game billboards that are served dynamically (based on gamer location) by 3rd party networks Comparable 15 second commercial in cable TV, Vehicles genre specific print, out-of-homeMeasurement 3rd-Party audit services track reach and frequency as well as special game metrics such as how long the gamer viewed the ad and at what time of the day. Lead-time 48 hours to 30 days Key Players Ad serving networks: Massive Inc., IGA Worldwide, Double Fusion.Budget Range 10€ - 30€ CPM 33
Product Placement Description Full integration of brands and products, hard-coded into games by the developer Comparable Product placement in films and Vehicles televisionMeasurement Third-party research needs to be developed to measure brand awareness lift and ROI. Lead-time 9 to 18 months Key Players Game publishers: EA, Take- Two, Atari, Activision, Konami, Vivendi Universal, Sega.Budget Range Flat fee dependent on level of brand or product integration and the popularity of the game 34
In-Game Static Description In-Game billboards and loading screens that are hard-coded into a game by the developer Comparable Product integration in TV, cinema, Vehicles videoMeasurement Third-party research needs to be developed to measure brand awareness lift and ROI. Lead-time 1 to 2 years, depending on the game development process Key Players Game publishers: EA, Take- Two, Atari, Activision, Konami, Vivendi Universal, Sega.Budget Range Flat fee dependent on brand name recognition of game title and positioning of advertisement 35
Advergames Description Bespoke mini-games that are created around a brand or product and are usually free to play Comparable Loyalty programs, experiential Vehicles marketing, guerrilla marketingMeasurement Ad-hoc research needs to be developed based on opt-in rates to measure the marketing program results. Currently measured on page views and click-through. Lead-time 4 to 6 months for basic games 6 to 12 months for advanced games Key Players Game Developers: Oberon Media, Blitz, PopCap; Game Portals: MiniClip, MSN, Yahoo!, RealArcadeBudget Range €10,000 to €1 Million 36
Fully Integrated Branding OpportunitiesDoritos´ Unlock XBox Campaign• Doritos wanted to “be in games”• Microsoft invited participants todevelop casual game ideasaround the Doritos brand• Five finalists were chosen, onewinner will have his / her gameproduced and distributed online(chosen by online voters)• Online tie-ins include micrositeand documentary videos aboutthe finalists• Increased brand awarness forDoritos and gamer affinity withXbox 37
Strategic Alliances and Cross-Promotion • Burger King and Microsoft teamed up to create three brand new casual games for the Xbox and Xbox 360 • Sold for $4.99 with Value Meals at Burger King stores • Sold 3.2 Million copies in 8 weeks (that´s $16 Million!!) • Avoided expensive retail channels by selling in-store • Increased awareness of BK´s new Value Meal program, designed to compete with McDonald´s and Wendy´s • All Xbox 360 players registered with Xbox Live, adding to Microsoft´s database of gamer information*Source: GameSpot, Reuters 38
Agenda1. Why Advertising in Video Games?2. Overview of the Video Game Industry3. Advertising Opportunities in Video Games4. Next Steps for Havas 39
Next Steps • Advise and assist clients with gaming strategy and implementation Creation of Video • Create in-house team devoted to gaming themes • Pool talent and work closely with other Havas units Gaming Unit • Develop ideas one client at a time • Create research to monitor ROI and brand lift for clients • Create strategic agreements with gaming companies for the global Strategic Global Havas network • Work directly with developers and publishers to integrate brandsPartnerships & Alliances and create bespoke games for clients • Develop Havas as a gaming knowledge center • Acquire or create an in-house game development team dedicated In-House Game to handling client needs as well as developing our own new projects • Create a game publishing division capable of competing or Development teaming with larger, more established publishers. 40