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Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times reporter Sharon Chan.

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July 25, 2007 9:46 AM

EA Sports, Microsoft make in-game advertising deal

Posted by Benjamin J. Romano

Microsoft and EA Sports announced today that five of the video-game publisher's biggest titles will be incorporated into the Microsoft's in-game advertising network.

The titles are: "Madden NFL 08," "NASCAR 08," "NHL 08," "Tiger Woods PGA Tour 08," and "Skate."

Advertisements will be placed in the games via the Massive Network, which Microsoft acquired last year.

It's doubtful that Peter Moore, the Microsoft video games executive who is leaving to head EA Sports, had much to do with negotiating the deal, terms of which were kept private. I'm asking about that and will post a response here.

(Because in-game advertising is handled by Massive, which sits within Microsoft's Online Services Division, Moore, who is part of the Entertainment and Devices Division, had nothing to do with the deal, according to an e-mailed statement from a Microsoft PR firm.)

During the E3 Media and Business Summit earlier this month in Santa Monica, I had a chance to talk about in-game advertising with Jeff Bell, corporative vice president of global marketing in Microsoft's video games business.

Bell brings an interesting perspective to the discussion because before coming to Microsoft, he was with DaimlerChrysler, where he worked on the Jeep brand. He tried several game-related advertising strategies including in-game ads (his team helped get Jeep as the vehicle featured in Microsoft's "Zoo Tycoon" game) and adver-gaming. He was also named Interactive Marketer of the Year by Advertising Age in 2005.

From our conversation, this EA deal sounds like just what Microsoft is looking for.

I asked him what role the company sees for in-game ads, and how much advertising is appropriate.

Bell: "I think there we do know and the data is overwhelming, that if you're in a reality based game, people don't want to see Acme. They don't want to see Blogo Shoes. They want to see 7-Eleven and they want to see Adidas. And so, from that standpoint, both from a product realism, as well as an advertising realism, they would like to have the real thing.

"I think where you cross over is you're not going to be seeing Massive or advertisements in 'Mass Effect.' So science fiction doesn't make as much sense.

"For us, I think we tend to focus more on the sports franchises, the reality based driving franchises, Tony Hawk, obviously has been a pioneer in that particular realm of being able to present things in the real world, real advertisements that can attract that audience."

He said EA is leading the way with advertising in sports games, but because of the slow and complex process of negotiating advertising agreements with sports leagues, franchises and stadiums, the area is just now building momentum.

I also asked Bell if he thinks game buyers should get a price break on games that carry a lot of advertising, the reason being that now publishers have a new revenue stream to tap.

Bell: "It's an interesting question, but it's so theoretical at this point, meaning that the business is still driven by the revenue from the sales of the games themselves that, there, I think we're all interested in the growth of the advertising model, but it is at present only a very small part of our overall revenue."

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